Rent to Own Stores: Are They a Rip-Off?
Rent to Own Process:
The sign up process is easy. Fill out a few forms, give some information, and sign a few pieces of paper and they will then deliver the merchandise to your home. It's called Rent to Own, so you really don't own the merchandise till the final payment is made. Until you make that final payment you don't own the stuff, you actually are on a week to week rental. They can take the merchandise back at anytime if you miss even one payment. Or you have the option to give the merchandise back if you no longer need it.
The Costs:
You pay weekly or bi-weekly for the merchandise, so the payments are affordable to just about everyone. But what most people don't read is how many weeks you have to pay for the stuff before they actually are the owners of it. Sometimes you have to pay for the rental for 2 years or more. Even if you are paying only $25 a week for something, over a 2 year period that will end up costing over $2600 dollars. Some places do require you take out insurance on the rental which will be an additional cost. The price that you end up paying after completing the contract can be as much as 3 times the cost of the item itself. While many people don't sit down and actually figure out how much this is costing you in the long run, they should.
Sometimes the merchandise you get is already used, has been rented out prior to you getting it, this usually doesn't make the price of your rental go down any. The rent to own place will be still making a hefty profit on used furniture.
When it makes sense to use a rent to own company:
This may make sense to use a service like this if you are staging a house to sell, or are staying at a location for a short period of time, and will be moving again.
How to not use a rent to own company:
If you are in need of appliances consider obtaining used appliances till you can save up enough money to purchase your own. Asking friends if they have extra furniture is another option. Many people have furniture that they are ready to get rid of, or know someone who is moving and wants to get rid of things at a bargain price. There are used appliance stores that will sell you appliances at a reasonable price and many even offer a guarantee.
If you are looking for long term furniture and appliances, the rent to own places should be the last place to look if you are concerned about the high cost of these places over the long term lease.
Published by Sunshine Red
I like to research about any and everything. View profile
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6 Comments
Post a Commentwhat if you were to pay off early? So confused!
Don't forget too that many people buying large ticket items will put it on a credit card. Some of those people are making minimum payments for far many more years than someone buying through a rent to own store. Do the math on that and I bet your RTO numbers will look a lot better.
Depending on the rent to own company you deal with can be a very hard thing. but some people in this economy can not go out and buy brand new things because it does get expensive. I do agree on some things in your article,but then again I disagree as well. I rent to own because it is the easy way to have things. Yeah you pay more for the item in the long run, but then again you have the items you want right there. you will still pay the same in if you buy it out right, because within three years your item can go out and then you have to pay someone 1000's of dollar's to repair it. Rent to Own is not a bad thing, it is the Easy Way for some people...
You're missing the point. WHen you "rent" to own the company you are renting from is like a "landlord" of the merchandise-if anything goes wrong they foot the whole bill for fixing it. Renting a home is more expensive than owning one but you know they'll take care of everything. Renting a washing machine is more expensive than buying one outright but, again, they'll pay for all the repairs until you own it AND (unlike Sears) they'll replace it free of charge until the original is fixed. If it's one you bought from sears you will be lugging laundry to the landromat and paying for gas to and from there as well as paying to use the laundromat facilities until it is fixed-rent to own? not as bad as everyone thinks.
Heck yea they are rip-offs. When I was younger, I had a rent to own center try to repo my furniture over five dollars. I refused to open the door an he eventually left.
Very informative!