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What Does Lease-to-Own Mean?

Apr 12, 2022

Someone receiving a package of something they shopped for

You might have been hearing the term “lease-to-own” a good deal lately — and you might be wondering what it means. To put it simply, lease-to-own means exactly what it sounds like. You lease the item from a company, and when you've paid off what you owe, you then own the item outright. It's also known as a “rent-to-buy” program, and it can be a great way to get what you want without having to pay for items using credit or paying the full cost of the item upfront. 

Getting Started with Lease-to-Own

The first step when getting started with a lease-to-own program is to find a company that offers the service, like Acima Leasing. Then, you can submit a lease-purchase application to become approved to start shopping for name-brand items across a variety of categories, including furniture, electronics, appliances and more. 

How Does Lease-to-Own Work?

A lease-to-own agreement is a type of contract in which the renter has the option to own the item they’re renting at any time during the lease. Typically there is a down payment and a high monthly payment associated with this type of agreement. A lease-to-own agreement allows people who may not be able to afford an item outright the ability to acquire it nevertheless.

Benefits of Lease-to-Own

When you enter into a lease-to-own agreement, you’re agreeing to lease an item for a specific period of time with the option to own it at the end of the lease. During the lease term, you’ll make payments that cover both your down payment and your eventual ownership of the merchandise. 

Get What You Want Now

One of the major benefits of the lease-to-own system is that it allows you to get what you want now. Rather than saving up to pay for an item in one payment, you can make smaller payments over time. This can be helpful if you need an item right away but don’t have the full amount to pay for it.

Increases Shopping Power

The lease-to-own option helps credit-insecure customers get the name-brand items they want, without being turned away simply because they have no credit or a poor credit history. Lease-to-own solutions are essentially an alternative to credit, opening the door to shopping in a different way than ever before — a way in which your financial past and your current financial situation are not factors in what you can shop for and when.

Disadvantages of Lease-to-Own

Lease-to-own agreements can be helpful if you're not quite ready to own a product outright, but there are also a few disadvantages to consider before submitting a lease-purchase agreement.

Lease-to-Own Can Be More Expensive in Long Run

One of the disadvantages of lease-to-own is that it can be more expensive in the long run. This is because you’re typically required to make a higher monthly payment and down payment with this type of agreement.

Alternatives to Lease-to-Own

There are a few alternatives to lease-to-own, if you aren’t interested in this type of agreement. One option is to save up for the item you want and pay for it in one payment. Another option is to borrow money from a friend or family member to shop for the item. Finally, you could also try using a credit card to shop for the item, but this may not be the best option if you aren’t able to pay off the balance in full each month.

Get Most Out of Lease-to-Own Agreement

If you decide that lease-to-own is the right option for you, here are a few tips to help you get the most out of your agreement.

  • First, be sure to read and understand the terms of your agreement before signing anything. It is important that you know what you are responsible for and what the company's policies are.

  • Second, be sure to budget your money carefully. Just because the monthly payments are lower than if you were to finance your shopping outright, this does not mean that you should spend more than you can afford.

Finally, always be on time with your payments. Late payments can result in late fees and other penalties.

How Can Acima Leasing Help?

Acima Leasing is a great way to get what you want now. Acima’s Find a Store page features thousands of national retailers – with easy payment options at each one! Acima Leasing also provides manageable terms that put you in control and help you get what you need from the stores you know and love.

Common Questions About Lease-to-Own

Is it a good idea to lease-to-own?

Lease-to-own agreements can be a good option for some people, but it's important to weigh the pros and cons before deciding if this is the right choice for you.

How is leasing different from a credit transaction?

When somebody buys something using credit, the financial institution that gave them the money for the purchase charges them back with interest and other fees. The customer then has to pay back the money they borrowed, plus all of the extra costs, over a period of time.

When someone enters into a lease agreement with Acima Leasing, they agree to let Acima Leasing purchase merchandise for them from a merchant. Acima Leasing doesn't give the customer any money. The customer makes payments to Acima Leasing for the merchandise while using it, and they can use a purchase option to own the property, or end the lease at any time without penalty. There is no interest, but the customer makes manageable payments.

Learn more about Acima Leasing here. Still have questions? Check out our FAQ page.