Home » Personal Finance » Buy Now, Leave it Be but Please Don’t Rent To Own

Buy Now, Leave it Be but Please Don’t Rent To Own

There are a lot of things that people want to have and some of them are just out of reach.

You can tell someone to just go without or save for the product but many times those words will just go on death ears.

Not sure what it is but I remember growing up and nothing was ever really bought at cost if it was more than $200.

Seemed like every was either putting things on layaway or the worse renting to own.  I know rent-to-own has its places but when you look at it you waste so much money.

What is Rent-to-Own and How it Works

Basically you want something but you can’t afford to pay for it outright.  Say something like living furniture or a television.  Instead of waiting you want it right now and decide you will just rent-to-own it.  Well renting to own will allow you to put a down payment on the item you want and make monthly payments until you own it.

In many cases if you decide you to want it you can return it to get something else or you can just walk away.  So if you see a HD television but don’t have the $750 upfront to buy one from the normal retail stores you can find a place that will allow you to rent-to-own it.

Usually they have a set number of payments and tell you upfront how many payments it will cost you to finish paying for it.

Looking at the Numbers – Just Crazy

Sure I know that a lot of people want what they want and trying to convince them is a lost cause but hey thats what we are here for, to try anyways.  So say you see a Sony HD television for $750.00 but just don’t have the money for it.  You can go to Rent-A-Center and get on a payment plan for as low as $30.00 per week.

These are made up numbers but in general this is how is works.  You think $30 is affordable and besides you really want that tv.  In order for you to own the television you will need to make 80 payments.

A television that you could have brought at Walmart or Amazon for $750 will cost you 80 payments at $30 per week.   The final cost if you decide to pay for the entire term will be $2,400.00!  Thats right you will pay three times as much for the same product.  Is this is basically how all centers work.

Sad Truth About Rent-to-Own

Even though we have been in a financial crisis in the US the numbers for the rent-to-own centers have actually shot up over the past few years.  This means that sadly people are renting more than ever.

Renting to Own
There has been a 50% increase in new rent to own customers since 2007.  Last year there were 4.2 million people using this as a means to own things.  The revenue for the retailers was at close to $8 billion last year.

The Good News

Though a lot of people to rent studies show that most don’t actually rent long enough to own the item outright.  Which is a good thing when you consider how much money they would lose if the made the entire payment.

Statistics show that most of the rent-to-own customers are actually female who earn less than $40k per year and have no college education.  Many think that woman have the better credit and in many cases are just renting to get things for their boyfriends or husbands who can get approved.

Have you ever rented to own?  If so what was it and would you do it again?