Are you planning to become a PCO driver? Buying a car is likely to be your cheapest option in the long run. However, if you do not have capital, there are other options to own a vehicle as well, such as taking out a loan or opting for the rent-to-buy program. Even though it entails a higher interest rate, the rent-to-buy scheme is one of the most practical ways to own a car. Here is everything you need to know about the rent-to-buy program.
What Is the Rent-to-Buy Program?
The rent-to-buy program for a PCO car is offered to individuals under specific terms and conditions: the PCO driver will pay for the vehicle in the same way that they would when they are renting a car. However, in a standard vehicle rental process, they will be losing both the money spent to pay the rent of the PCO car and the vehicle itself at the end of the contract. On the other hand, when a PCO driver signs up for a rent-to-buy program, a large portion of their weekly rental fee that they will be paying will go towards the car purchase. This means that by the end of the deal, the PCO driver will have complete ownership of their car and be saving money in the long run. Here is an example to help you understand how a rent-to-buy scheme works:
Mark rented a typical PCO car and signed a two-year vehicle rental contract with Uber. According to the contract terms, Mark was asked to pay a weekly rental fee of £150. After two years, by the end of the contract, Mark had paid a total of £15600 (from his savings) and had been asked to return the car as well.
This was when Mark learned about the rent-to-buy program from a friend who works at the G&M Direct Hire. According to the conditions of the rent-to-buy plan, even though Mark will be required to pay a heftier weekly rental fee, by the end of the deal, the PCO car will be registered under his name.
What happened was that the money that Mark paid all these years was actually the installment price of the vehicle. As per the rent-to-buy program, Mark paid £200 every week, which means that he had paid a total amount of £31200 after three years. Out of the total payment, the money paid to purchase the PCO car was £10400, whereas the rental fee was £20800. So, as soon as the payments and duration of the contract end, the ownership of the PCO car will be signed to Mark!
In simpler words, the weekly payment of a rent-to-buy program can be divided into two parts: the rent you are paying for the PCO car and the payment in installments made towards purchasing the vehicle. Before signing a contract, make sure that you understand the terms and conditions of the rent-to-buy program to avoid any trouble in the future.
Pros and Cons of the Rent-to-Buy Scheme
Now that you know what a rent-to-buy program is and how it works, it’s time to decide whether it’s a favorable option for you or not. To help you decide, we have compiled a list of the pros and cons of the rent-to-buy scheme. Read on to learn about the advantages and disadvantages of opting for the rent-to-buy program.
Pros of the Rent-to-Buy Program
1. No Interest
Unless you use dealer financing, you won’t be paying any interest. This means that the total sum of the rental fee will be consumed for the purchase of the PCO car.
2. No Credit Check
Compared to a contract to lease or buy a car, the rent-to-buy program is easier to get. No credit checker is required, making the rent-to-buy program a viable and accessible option for everyone.
One of the biggest advantages of investing in the rent-to-buy program is that the PCO driver will own the vehicle at the end of the contract. But this isn’t even the best part; it’s that the PCO car will most probably be a brand new one. Hence, opt for the rent-to-buy program if you are looking for a practical option to own a vehicle.
Cons of the Rent-to-Buy Program
1. Doesn’t Include a Vehicle Warranty
A rent-to-buy program doesn’t include warranties. This means that you might have no protection in case the PCO car breaks down during the contract.
2. Requires Frequent Payments
A PCO driver will pay back the loan more frequently than an average buyer who pays monthly installments. You might lose the count of payments and even get tired of the contract.
One of the most prominent drawbacks of the rent-to-buy program is that a PCO driver will be paying significantly more for the vehicle than its actual worth. Since you won’t be paying any interest, the dealer will ask them to pay a heftier rental fee, which will ultimately add up to a larger sum than the vehicle’s original value.
Wrapping It Up!
The rent-to-buy program has its fair share of pros and cons, which may or may not work for PCO drivers depending upon their current circumstances. Even though it’s one of the most convenient and popular options to own a car in the UK, it can be a bit more expensive compared to buying a vehicle outright. Therefore, before you sign a contract, be advised to read the terms and conditions to know if they suit your situation or not. In case you choose the rent-to-buy program, it is important to make sure that you keep the PCO car well-maintained and pay the weekly rental fee on time.
At G&M Direct Hire, we aim to make PCO car services available for everyone. We offer flexible PCO car rental plans, making owning a PCO car affordable and accessible for all. To learn more about the PCO car rent-to-buy program, contact us right away!