When you need it now, how do you choose between buying outright or lease-to-own financing? Learn the pros and cons of each option.

Key takeaways

• If you need items like appliances or furniture right away, lease-to-own financing can help you take it home today and pay over time.  

• Paying in full avoids the costs associated with financing, but it requires significant upfront cash, which isn't always an option.

• From urgent appliance replacements to setting up a home office, lease-to-own financing helps you shop now and pay later.  

You’ve found the perfect sofa or the fridge you desperately need. Now comes the big question: Should you buy it with cash or consider lease-to-own financing?

Making a large purchase is a big deal, and how you pay for it matters. While paying in full upfront seems ideal, it’s not always possible – or the most practical choice.

Lease-to-own financing can be a powerful tool, allowing you to get the items you need right away while making predictable payments. The right decision depends on your personal financial situation, how urgently you need the item, and your long-term goals. This guide will help you understand the options so you can choose the best path for you.

What does it mean to lease-to-own?

Lease-to-own is a straightforward way to get the items you need without paying the full price all at once. Snap Finance is a leading provider of lease-to-own financing.

With Snap, how does lease-to-own financing work? Snap Finance purchases the item for you from the retailer, and you make regular, scheduled payments to Snap until you’ve completed the terms of your lease and made all payments. Then you own the item.

This type of financing is designed for durable goods – essential items that often can't wait. This includes furniture, appliances, electronics, tires, and more.¹ A key feature of Snap Finance is that no credit is needed to apply, which makes it available to people with lower credit scores.² The payments are aligned with your paydays for 12-18 months, or you can choose early ownership options to save on overall lease costs.³

The pros of buying outright

Paying for an item in full with cash has clear advantages. When you have the money available, buying outright is a great option.

First, you avoid any interest charges or fees. The price you see on the tag is the price you pay. Second, you have full ownership from the moment you walk out of the store. The item is yours, with no strings attached and no future payments to think about. For those who have a healthy savings account, buying outright often represents the best long-term value because you’re not paying anything extra for the convenience of financing.

However, this path isn't realistic for everyone. It requires having a significant amount of cash on hand, which could take a long time to save.

When leasing might be a better choice for you

So, when is leasing better than buying? The answer often comes down to timing, finances, and immediate needs. Let's explore the situations where leasing might be right for you.

• You need the item now but don't have the cash. Life happens. If your mattress is shot or your car needs new tires, you can't always wait. Lease-to-own financing helps you get what you need immediately.

• You to pay over time. In the lease-to-own vs. buy outright debate, cash flow is a major factor. Leasing breaks down a large cost into smaller payments that can be aligned with your pay schedule.

• You don’t want to drain your emergency fund. Having savings is important for unexpected events like car repairs or medical bills. Using all your savings on a large furniture purchase, for example, could leave you vulnerable. Lease-to-own financing is one way to get what you need without dipping into your emergency fund.

• You have a challenging credit history. Recent research from Snap Finance found that among those with credit scores below 670, 78% have been turned down for financing. All credit types are welcome to apply for Snap's no-credit-needed lease-to-own financing.²

Real-world examples of when leasing works

Let's look at a few common scenarios where you might face the choice between lease now, pay later vs. waiting to save or purchasing now.

Scenario 1: Your fridge stops working
Your refrigerator breaks down two weeks before you're hosting a big holiday dinner. You need a new one fast but don't have the savings to cover the model you want. When considering whether to lease appliances or save up, the urgency factor becomes clear. With lease-to-own financing, you can get a new refrigerator delivered sometimes as soon as the next day and pay for it over time.

Scenario 2: You're a new remote worker
Congratulations! You land a new freelance remote job that requires a proper home office setup, including a new computer and an ergonomic desk. You don't have a credit card and can't wait months to save. That's when an alternative furniture financing option, including lease-to-own financing, might be right for you. You can get the necessary equipment to start your job right away and pay over time.

Scenario 3: You're furnishing your first home
You just moved into your first apartment. After deposits and other costs, you have $400 in savings. But you need a bed, a sofa, and a kitchen table. Buying everything outright is impossible. Lease-to-own financing could be a way to furnish your apartment now, making your new place feel like home while you pay over time.

Cost comparisons over time

It's important to understand how the costs of lease-to-own financing vs. purchasing outright compare. While buying with cash is the less expensive way to acquire an item, lease-to-own financing provides advantages. Let’s compare the options in a Snap Finance vs. cash purchase scenario.

For many people, lease-to-own financing’s value lies in providing immediate access to what they need and the convenience to pay over time. With Snap's lease-to-own financing, you can use the Maximum-Term Plan or an early ownership option to save on overall lease costs. Here's how it works:

• Maximum-Term Plan (lowest payments)³
  Customers make payments over the maximum 12-18 months of their lease agreement. This is the default payment schedule.

• Early ownership options (lower costs)³
  Customers can save significantly on their cost of lease by making all regular payments on time and paying the required amount before the end of the maximum term, including any early buyout promotions. Customers must schedule an early ownership option.³

Choose what works best for you

Ultimately, there is no single right answer to the lease-to-own vs. buy outright question. The best choice is the one that aligns with your financial situation, your needs, and your timeline.

Lease-to-own financing provides a practical and convenient solution. It empowers you to shop for the furniture, appliances, or electronics you need today and pay later. Explore your options and decide on the path that works best for you.

For a deeper dive, check out these blog posts from Snap Finance:

• Lease vs. purchase: What to consider before buying

• Lease-to-own 101: How Snap Finance works from application to ownership

The advertised service is a lease-to-own agreement provided by Snap RTO LLC. Lease-to-own financing is not available to residents of Minnesota, New Jersey, and Wisconsin.

¹ Some restrictions may apply on leasable auto parts, electronics, or sporting goods. Please check with merchants for details.

² Not all applicants are approved. While no credit history is required, Snap obtains information from consumer reporting agencies in connection with applications, and your score with those agencies may be affected.

³ The default payment plan is the Maximum-Term Plan, which includes 12- to 18-month renewable terms and is your highest cost option. To exercise an early ownership option, including any early buyout promotions, you must make all regular payments on time and ensure the required amount is paid within the applicable timeframe through the customer portal or by contacting Customer Care at 1-877-557-3769. Early buyout promotions may include a cost of lease above the merchandise price. For details and limitations, including relating to applicable early ownership options, refer to your lease agreement.