We have all seen rent-to-own stores where you can make weekly or monthly payments on things like furniture, appliances, and computers for a period of time until you own them outright. When you see commercials or other advertisements for rent-to-own stores, you may wonder whether the deals that they are advertising are any good or not. The advertising is aimed at people who want or need the items at the store now, but who have no way to pay for them outright all at once. Often, customers can rent items with no credit check and the weekly payments can usually fit into their budget.
While the ability to get items now and pay for them in payments that fit your budget may seem like a great thing, it is important to consider the bigger picture of how much you will pay for those items over the term of the agreement. Research that has been done on the subject of rent-to-own agreements suggests that items purchased through these agreements often cost the buyer two to three times as much as they would cost if the buyer purchased them outright. In many cases, buying an item at a regular store using a high interest credit card and paying the same amount towards the balance on that card each month as you would make in weekly rent-to-own payments results in “owning” the item and paying off that credit card balance in about half of the time (and expense) that it would take to acquire it by renting to own.
Unfortunately, the advice about avoiding rent-to-own agreements is advice that no one wants to hear even though it makes good financial sense. If a person diligently sets aside the amount of the weekly payment for the item that they want until they have enough to buy it outright from a regular store, they could have the item within a few months to a year, depending upon the cost of the item and the size of the weekly payment. Renting to own is a very expensive way to acquire items that you want or need. Unfortunately, some people are in situations where the prospect of a rent-to-own agreement sounds like just the answer that they are looking for. I would urge anyone in that situation to explore all possible alternatives before renting to own including saving up to buy it outright either used or new, depending upon whether you can find a good used item. You work hard for your money and you deserve to keep more of it.
Photo by alvimann on morguefile.com.