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Rent 2 Own Cars Australia Pty Ltd
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Australia Credit License 428838
Australia Credit License 428838

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How to Overcome Bad Credit Hurdles When Applying for Car Loans in Melbourne

Most financiers will not have a problem approving a car loan for borrowers who have good credit records and their current status allows them to repay the loans without any challenges. The problem comes when you have bad credit and you have to convince the lender that you are still capable of making good the repayments once the car loan financing has been approved. The following tips will make this process a little bit easier with high chances of being approved.

Get in House Finance.
When choosing this type of finance to buy a car in Melbourne make sure the company has the required credit licenses so that you as the customer have protection governed by ACCC. In house finance companies such as Rent 2 Own Cars are accredited with the appropriate credit licenses and have a excellent track record in customer satisfaction and they add a personal touch and a human face to the loan process.

Be Transparent and Honest in Your Application.
Honesty and integrity are virtues that can go a long way into ensuring your application gets a nod from the financiers. Most lenders will go through your credit history so as to establish the nature of risk you bring to the company and the likelihood of defaults when approved. If you hide important details or bend the facts to favor your situation, the financier may pick these inconsistencies and use them against you which could mean an outright decline of your application. To avoid this, give the financiers the paperwork they ask for and make everything clear from the outset so that you can win their trust.

Argue Your Repayment Case with Sufficient Documentation.

Before advancing a car loan, all lenders in Melbourne must go through the process of confirming your repayment ability. In the income and expenditure profile you present, they go through the figures so as to ensure the minimum for personal and family expenses are provided for. In order to jump past this hurdle, you should present an income-expense model that justifies the size of the car loan. Some lenders may accept centre-link payments such as disability payments, permanent foster parenting payments and family tax benefits as income sources.

Make a Reasonable Case of the Vehicle You are Buying.

Since you are a credit risk, the impression the lender has is that you are slowly getting back your financial muscle. This means the car financing arrangement you choose should be moderate, or at least reasonable in line with your circumstances. For instance, having no savings and applying for $20,000 car loan will show lack of seriousness and this may lead to an automatic decline.

Avoid Multiple Applications.
It is important to shop around so as to compare the rates and quotes before making your application. However, you should not go ahead and make multiple car loan applications because this is recorded on your credit score report. In the event a lender declines your application, the impact this can have on your credit scoring is damaging.
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Australia's number 1 rent to own company, Rent 2 Own Cars
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Is a Rent 2 Own Car a Good Option for Those with Bad Credit?
Having bad credit undoubtedly makes life difficult when trying to make major purchases that require a loan. So, of course, if you have bad credit and want to purchase a car, you’re probably going to have a difficult time getting approved for a standard car loan.
What is a Rent 2 Own Car?
A rent 2 own car is vehicle that is offered to individuals under a specific agreement; they will pay for the vehicle as they would when renting a car, but instead of turning the vehicle in at the end of the term and losing the money they spent, a portion or all of the money paid for renting it will go toward its purchase.
Here’s an example of how it would work: You find a dealership that offers a rent-to-own program and visit its lot. A car salesman will take you around and help you pick out the car you like. Once you choose the best one for you, you place a down payment and then make rental payments on the car (usually one payment per week).
In addition to the down payment, the criteria for a rent 2 own application often include proof of ID, proof of residence and proof of income.
In many cases, the entire amount of your payment will be applied toward the purchase of the car, but it’s important to check with the dealer to make sure this is how they run their program. In all cases, once you’ve made your final payment, the car is yours.
How is Rent 2 Own Different from Leasing?
You may wonder what the difference is between car leasing and rent 2 own since traditional renting requires you to return the car. Here are some major differences between leased and rent 2 own vehicles:
Ownership: Payments on a leased vehicle are not applied to a purchase and at the end of the term, the vehicle will be given back to the company.
Credit checks: Leases usually require credit checks, whereas rent-to-own vehicles do not. Also, rent 2 own car payments are often not reported to credit bureaus because you don’t borrow any money before beginning payments.
Down payments: Rent 2 own vehicles require down payments and leased vehicles do not.
Vehicle age: When you lease a vehicle, it is usually always new, but rent 2 own cars are usually used since the companies offering the cars are typically not affiliated with franchised new car dealers.
Car repairs: Leasing a vehicle comes with free repairs, but in most cases, rent 2 own vehicles do not provide the same benefit and require additional warranties to be purchased to cover repairs and towing.
Incentives: Often, you can take advantage of vehicle incentives when leasing a car because the manufacturer is placing the offer, but since rent 2 own cars are not associated with manufacturers, you’re not likely to catch any deals or discounts.
While there are a number of differences between the two types of car financing, there are a few similarities as well, including that they both usually come with fixed payments, the payment terms are usually somewhere in the two-three year range and you can expect to accept some type of dealer financing.
Are there disadvantages of Rent 2 Own Cars
So let’s say you’ve thought about getting the bad credit auto loan but don’t like the interest rate you’re offered. Then you looking into leasing and decide it’s not for you because you want to own the car. With few options left, you strongly consider a rent 2 own car.
It really depends on the sacrifices you’re prepared to make by taking this route.
Expensive: One of the biggest drawbacks to rent 2 own programs of any kind is that you’ll pay more for the product that it’s actually worth. You might not be paying interest, but the payments you make will add up to a larger sum than the value of your car. The seller has to make a profit somehow.
Frequent Payments: You’ll be making payments on a weekly or fortnightly basis
No Effect on Credit: Your payments will probably not be shown on your credit reports, so don’t count on the purchase to help build your credit.
No Warranty: Something else to remember is that since rent 2 own contracts typically don’t include warranties, if you don’t purchase one outside of your contract and your car breaks down soon after you begin making payments (which could happen since the vehicle is likely to be older), you might not have any protection.
If after seriously weighing the pros and cons of rent 2 own vehicles you decide this is the best option, it’s good to investigate the dealership you want to work with to ensure it is a legitimate business.
By taking the time to protect yourself under this circumstance, the benefits of buying a rent 2 own car (no credit check, fixed payments, short terms, vehicle ownership) could actually make this type of purchase worth it.
While some prospective car buyers have turned to bad credit car loans to get the cars they want, others have considered rent 2 own cars as an option if they are having a difficult time securing an affordable auto loan. If you have heard about rent 2 own cars, take time to learn more about them and whether they are something you might consider for yourself.
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A happy customer, thanks Kieran, happy motoring
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SAVE on you FUEL, apply for a car online or call Tim 0407 350 777
www.rent2owncars.com.au
You MUST mention this post !!!!!!!!!
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Check this out !!!  Can't get a car loan
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3 NEW OFFICES OPEN. Rent 2 Own cars has again spread it's wings with offices open in Gympie (Qld), Mildura (Vic) , Sydney West (NSW).
Congratulations to Jason , Saul, Garry & Yvonne on becoming our newest Franchisees, we look forward to helping you on your path to business success.      Next to open - ADELAIDE !!
"Bad credit don't sweat it ..... we say YES !! "
www.rent2owncars.com.au
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'Hi clemens and jane just a note to let you guys no how greatfull natarlia and i are for everything you have done for us over the past 13 months we are truly lucky to have found u and appreciate all u done for our family' (Brett & Natarlia, Brisbane)

Thank you for these very nice words, Brett & Natarlia, that means a lot to us and it is very much appreciated.
Rent 2 Own Cars Gold Coast
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