Estimated Monthly Savings: $250
What is a Rent-To-Own Appliance/Goods Business?
A Rent-to-Own business is a legally documented sale of a piece of tangible property. This piece of property can be anything from a piece of furniture (i.e. couch, chair, bed, etc.) to an appliance (i.e. washer, dryer, microwave, refrigerator, stove, etc.). A person is allowed to lease or “rent” the item for a payment that is made each week/month for a specified period of time. When that “lease” runs out it comes with the option to pay for the rest of the product so that the customer can keep it if they want, or they may return the product at their discretion.
Rent-to-Own Options For Appliances/Consumer Goods is a Terrible Idea:
This may sound like a great idea as in, “Oh, wonderful, I just put down a few dollars every week or month for a few weeks/months and I pay off this item and it’s mine to keep!”… but it’s not that simple! While on the surface these companies may seem like a great deal, the consumer is really the one getting hoodwinked on this one!
Why are these stores a bad option?
Well for many reasons, actually!
First off, these rent-to-own options always have the user paying far more than the normal sticker price on an item. The reason it doesn’t feel like it is because with the payments spread out over time it may feel like you are paying less.
Second, many of these stores have come under criticism by the Better Business Bureau (BBB) for failing to disclose the percentage of interest that their customers are paying. Many just tell the customer, for example, “Your payment will be $35 a week for 10 weeks totaling $350.”… for the microwave they just purchased. What they will not tell that customer that is if they were to buy that microwave it sticker price it would be $175!
Third, many of these stores can charge in excess of 100% interest on the item(s) that the customer is renting-to-owning. That means you could buy two (2) or more of those appliances at the sticker price!
Is There a Better Option?
Fortunately, the answer to that is absolutely, yes, there is!
Simply save that amount of money you were going to give that “rent-to-buy” company each week/month and purchase the item outright when you have saved enough money to do so! You will save more than half of your money as many of these stores will charge 100% or more interest built into every payment they charge you!
Remember: They are in the business to make money, and when charging in excess of 100% interest they are the one making the money, and you are the one getting shafted!
You are far better off just buying the item outright from a store or over the internet and saving the money you would spend on interest to help start paying for the next item!