When unexpected expenses arise, such as suddenly needing a new pair of glasses, it can be stressful trying to figure how you will pay for the expense. With only 30% of Americans having an established long-term financial plan, many people may not have the money to be able to buy the things they need. Thankfully, there are flexible lease-purchase programs available to make commodities more accessible. If you’ve been curious about buying furniture, appliances, medicine, or other necessary things using lease to own programs, check out these five components every agreement will have.
What Are Flexible Lease-Purchase Programs?
This buying option involves signing a lease to take a product home instead of paying the full amount upfront. Then, you can make payments over an agreed-upon period of time to conveniently pay off your commodity.
Lease Options
When choosing a lease-purchase plan, it is important to know your options. Many sellers will let you negotiate the specific terms of the agreement, such as payment frequency and the amount you need to put down on the product when you sign. It is important to take your paycheck cycle into consideration when choosing a payment plan, as a bi-monthly payment option may be more convenient for you as opposed to paying a larger amount once a month.
Right to Terminate Agreement
As a buyer, you reserve the right to terminate the agreement if you are no longer satisfied with the product. It is important to know that you will have to return the product upon termination, and you may not receive any of your payments back. Different lease options will also have different termination policies. For example, furniture leasing may allow you to cancel the agreement within the first 90 days, while using a lease-purchase program for prescription glasses may not allow a refund of any kind. Talk to the seller about termination options if you are unsure.
Credit Check
Although the seller may check your credit score, you generally do not need a good credit rating to enter in a lease-purchase agreement. The seller just wants to make sure it is likely that you will make your payments on time until the product is completely paid off. That is why flexible lease-purchase programs are also referred to as bad credit financing.
Tax Benefits
Making consistent on-time payments can help you at the end of the year, as your lease payments can be considered tax-deductible since you would also be making interest payments. Talk to a tax professional to learn if your payments qualify as a deductible.
Buyer Benefits
One of the biggest benefits for a buyer in a lease-purchase program is that the payment period can last as a trial period for the commodity. As previously mentioned, you may have the option to terminate the agreement if you are no longer satisfied with the product. Buyers will also enjoy having the benefit of early payment options to pay off the lease amount in full if it becomes convenient to do so.
Final Thoughts
Flexible lease-purchase programs are a convenient way to buy what you need. They can provide tax deduction benefits, and even serve as a trial period if you are unsure of how much you will like the product. For more information, don’t hesitate to rely on Okinus today.
