Lease to Own

The term lease to own refers to a type car dealership that directly finances the vehicles that they sell. Like buy here pay here, in-house financing, and tote the note dealers, payments are usually made at the dealership on a weekly or bi-weekly basis. And like those dealers, the small gap between payments offers the dealer the ability to quickly repossess the car if payments aren't made. In addition, lease to own car dealers usually don’t check the credit of borrowers. One difference is that, unlike buy here pay here dealers, lessees don’t own their vehicles during the lease term, although most of these leases come with the option to buy the vehicle for a small charge at lease end. The disadvantage of these dealers is that many of them don’t report loans or payments to the credit bureaus, so even if all payments on the lease are on time, it won’t improve a borrower’s credit.