Confused about whether to rent or buy containers? There’s a third option! Learn all about rent-to-own (RTO) shipping containers, how it works, and its benefits. In this blog, we’ll help you find the right option for your shipping needs and budget.
Choosing between buying and renting shipping containers can be tricky, especially if you aren’t sure about your long-term requirements.
But don’t worry! A special container use agreement may get you out of this fix. Rent-to-own is a cost-effective and low-risk payment option, perfect for when your long-term needs are uncertain. Read on to learn everything there is to know about this type of agreement, plus whether it’s the right option for you.
Interested in one-way leasing or buying containers instead? Reach out to our team of experts here, to find out how to get quality containers within your budget.
Rent To Own shipping containers: What does it mean?
‘Lease Buyout’ or ‘Rent To Own’ (RTO) is when you rent a container with the intention of owning it at the end of the leasing period.
Think of it like buying a new laptop on EMI (equated monthly installment). That’s pretty much how Rent To Own works — with a few distinctions. It’s generally done in one of two ways:
- You pay a regular leasing rate and then a big lump sum at the end to seal the deal.
- You pay a higher leasing rate than a standard lease agreement, which accrues into the container price at the end of the lease period.
Pretty simple, isn’t it? Now, let’s find out more about how the RTO process works.
Options for Rent To Own shipping containers
Most companies offer limited options for Rent To Own shipping containers. The most common ones are 20ft and 40ft standard dry containers. Apart from sizes, you can also get containers in different grades. These include:
- New (one-trip)
- IICL (certified/IICL/CSC plated)
- CWO (certified/AV/CSC plated/cargo-worthy)
- WWT (wind and water tight) containers
Next, let’s take a look at how the RTO process works.
What is the Rent To Own containers process?
The concept seems straightforward, however, the actual rent-to-own process has several steps:
- First things first, choose a leasing company based on your preferences, such as location, container type, leasing rates, and contract terms.
- Next, pick out a container that works best for you. It’s important to note that most RTO companies only offer standard sizes, such as 20ft, 40ft and 40ft HCs.
- The leasing company then runs a soft credit check and offers you different term options. Standard agreements are between 6 months and 24 months.
- Based on your requirements and resources, you then select the appropriate terms — agreed upon by both parties.
- Then, you sign an agreement with the leasing company to pay them a specific amount every month for the decided duration/term.
- At the end of the term, once you’ve paid off all of the installments, ownership is transferred to you. Ta-da, the container is yours!
It’s important to note that the terms and conditions of RTO agreements differ from company to company, so you’ll need to find the one that works best for you.
When is it a good idea to Rent To Own a container?
Now that you know how Rent To Own works, it’s time to think about whether this is the best option for you.
To make it a bit easier to decide, here are some situations when you should consider the Rent To Own method.
You need long-term storage
Do you require the container for more than a year? You may end up accruing hefty interest with a standard lease agreement. Rent To Own shipping containers is the best option in this case. It ensures that the money you pay amounts to ownership at the end. So you can see each installment as an investment. It’s win-win!
You don’t have enough upfront cash
As a business owner, you need funds for critical business operations. Perhaps you don’t have enough cash to buy containers upfront. But you’d still like to own them eventually. A Rent To Own agreement fits pretty well in such a scenario, as you won’t have to fork out all of the money at once.
You want to make a smart investment
Unlike other storage units, containers have high resale value, plus durability. Thus, you won’t have to worry about major asset depreciation. A Rent To Own agreement is a great long-term investment plan for shipping containers. You can resell them at a good prices whenever you want, and even make a profit.
If these reasons don’t resonate with you, perhaps Rent To Own isn’t for you after all.
In that case, it’s time to consider leasing or buying equipment instead. Let’s look when it makes sense to lease, and when it makes sense to buy.
Other options: Leasing or buying a shipping container
There are 4 major factors to consider when deciding whether to lease or buy shipping containers, which are:
- Duration of use
- Type of use
- Container maintenance costs
- Available budget
Here are some questions you can ask yourself before making the decision:
How long (and how often) do you need the container?
- Is it for one-time use? For several months? Or even for more than a year?
- If your need is short-term, leasing is your best bet.
- If your need is long-term (and fairly unpredictable), you should consider buying instead. This is because renting rates and accrued interest may end up costing you more than the actual value of the shipping container.
Why do you need the shipping container?
- Determine if you need to modify the container, or require custom sizes.
- If yes, buying is a better option for you, as leasing may have restrictions when it comes to modification and sizes.
Do you have the time and resources to spend on container maintenance?
- If not, consider a leasing agreement.
- If yes, buying is the better option for you.
What is your budget?
- Buying and maintaining a container can be fairly expensive. However, if you’ve got the funds, and plan on using containers long-term, we recommend you buy them up front.
- If you’re short on funds, leasing is a better option, as you can pay in installments, and don’t have to worry about maintenance costs.
Benefits of leasing vs buying a shipping container
Once you’ve asked yourself all of the necessary questions about leasing vs buying, there’s another step. Considering the benefits of each.
We bet you’re curious about the costs for Rent To Own. Don’t worry, we’ll go over this in the next section. Once you know what the overall cost is, it’ll become much easier for you to make the decision between buying, leasing, and RTO.
How much does it cost you to Rent To Own a shipping container?
The total cost of a Rent To Own shipping container includes the container price, delivery costs, accrued interest, and overhead charges, if any. The cost also varies depending on the size, type, grade, and warranty of containers.
Let’s compare the cost for rent to buy, one-way leasing and purchasing standard 20ft and 40ft shipping containers:
|Price comparison for containers in USA|
|Container type||Rent To Own||One-way lease (Shanghai to Houston)||Buying|
|20ft standard container||$800/mo for 1 year||$463||$2,072|
|40ft standard container||$1,050/mo for 1 year||$1,106||$2,707|
Had a look at the prices and realized that RTO isn’t for you after all? With all of the added costs mentioned above, it can look a little steep. If this is the case, you can lease one-way containers or buy equipment easily on Container xChange.
We’re a marketplace for container users and suppliers, with over 10,000+ containers available on our platform. We’ve got equipment in over 2,500 unique locations around the globe.
On xChange, it’s so simple to get containers at competitive prices. Whether you want to own them or rent them. The process of finding great deals, negotiating rates and making payments is quick, convenient and safe. So you can organize containers whenever you need them. No fuss, no frills.
Click the banner below to find out how you can find equipment at prices you’ll love, negotiate rates directly with owners, and handle all payments in one single place.
What you need to know about renting to own containers
Rent To Own shipping container agreements have several standard terms and conditions across the industry. Some important things to consider before entering into a Rent To Own shipping container agreement include:
Can you modify a Rent To Own shipping container?
Container leasing companies generally don’t allow you to modify RTO containers during the rental period. Once you’ve paid all installments and got the ownership, you can modify the container as per your needs.
What are the common penalties with rent-to-own agreements?
Some companies have penalties for the late payment of monthly installments. You should also confirm if there’s any prepayment fine in case you buy out the lease earlier than your term.
How long does the Rent To Own container agreement process take?
This depends on the efficiency of the company, documentation, and your cooperation. Generally, it takes 2-3 days for the application process and 1-2 weeks for the final delivery. As for the entire Rent To Own shipping container agreement duration, this depends on the terms you chose.
Can you change the type of leasing agreement later?
Some companies allow you to change the Rent To Own agreement into a regular rental arrangement. However, you’ll need to confirm this with the leasing company.
Get shipping containers at competitive prices on Container xChange
Now that you know all about Rent To Own shipping containers, is it for you? If not, we’ve got other great options available. You can lease or buy containers directly on the Container xChange platform.
Once you’re a member, it’s so simple to find shipping containers to suit your needs. Just type in your requirements, find available offers, and start communicating directly with container owners to find a deal that works for you. Everything is managed directly on the platform. Yes, we mean everything.
Here are some of the benefits you’ll get when you become a member:
Safe payment handling
Manage and track of all your payments in one place — on Container xChange. Having issues with a payment? Our team is always here to support you. With the xChange wallet, you can rest assured your payments are safe and secure at all times. Plus, receive just one invoice each month. Simplicity at its best!
Use our trusted partner network
Finally, stop spending hours of your time researching and vetting partners — we do all of the dirty work for you! Each and every partner on xChange has been vetted and pre-approved, so you can get straight into negotiating deals that work for you. Think of all the time you’ll save.
Compare prices easily
On xChange, all prices are available upfront. It’s easy to compare the prices for multiple offers on one single dashboard. So that you can make the best decision for your needs and budget. Close all of those tabs, it’s time to work efficiently on one platform, at last.
All prices and rates are negotiable, so you can pay a price you’re comfortable with. Not happy with the final price? Simply look for a new deal. You can speak directly with partners to discuss prices, terms and conditions. You heard right, absolutely no middle men involved.
No commission on deals
Need one more reason to sign up as a member on Container xChange? We charge 0% commission on all of our deals. So you can avoid those pesky hidden fees once and for all, and save money when buying or leasing containers.
If you’re ready to find offers on containers right away, why not sign up for a free demo with one of our helpful experts?
You’ll get a sneak peak of our easy-to-use platform, and a chance to learn more about how xChange can work for you. Click below to schedule your demo today. Finding out how to get containers at competitive prices, from reliable sources is just a banner click away!
What is Rent To Own?
Rent To Own is a leasing method whereby you rent a shipping container for a specific duration, and at the end of the leasing term, the container is yours.
How much is a 20ft shipping container?
To lease a standard 20ft shipping container from Shanghai to Houston, you’ll pay a pick up charge of around US $463, from Qingdao to Chicago, US $391, and from Chengdu to Moscow US $1,300.
How much does it cost to rent a 40ft shipping container?
To lease a standard 40ft shipping container from Shanghai to Houston will be around US $1,106, from Qingdao to Chicago US $700, and Chengdu to Moscow US $1,201.