For decades, rent-to-own services like Rent-A-Center have advertised themselves as an affordable way to purchase pricey electronics and appliances by making monthly payments. But while it might seem tempting to make a small monthly payment on a huge TV, an investigation by our smarter siblings at Consumer Reports says you could end up paying upward of three times the retail price if you go the rent-to-own route.
While CR admits there are lures to some rent-to-own plans, like the ability to just return the item to the store when you can no longer make payments, the negatives outweigh the benefits:
“Consider the deal for a $612 Toshiba laptop computer we found at one rent-to-own store. It was being offered at $38.99 a week for 48 weeks, for a total of $1,872, excluding sales tax and other charges. That's the same as buying the laptop at the manufacturer's suggested retail price and financing it at an interest rate of 311 percent. You could buy three of the laptops outright for that $1,872.”
CR points out that you'd actually fare better by financing on a high-interest-rate credit card. Figuring a 29.99% interest rate and still paying $38.99/week (about $156/month), you'd save more than $1,000 compared with renting-to-own and you'd own the laptop in only 20 weeks, instead of 48.
You must first consider the group that rents from these stores.
ReplyDeleteThey cannot afford to buy because:
1. bad credit
2.most will have the item repo-ed
3. some will take the product with them and leave town.
4. some will pay with food stamp exchange
My advice is to save up the money to buy the item at another store if you don't have credit. Take the money you would be paying RAC and put it away until you have enough to buy the item you want flat out from like Walmart or somewhere. You save ALOT of money! Also it's no need to say that cannot be done because if you have the money to spare to buy from RAC in the first place and make the payments then you should be able to just put the money away and save.
ReplyDeleteDuh! It only takes a little math skills to determine that if a dvd player costs $100 and you pay $20 a week for 15 weeks that it would cost $300. Duh.
ReplyDeleteI used to work at Rent-A-Center and one my favorite memories was going to repo a 60 inch TV from a trailer in Delaware. These people were paying like $60 dollars a week for this TV. When we went in to get it, we had to step around a hole in the floor of the trailer or fall through to the ground. Then, the TV was full of roaches when we got it back to the store. People have no sense of priorities in this world today. For $60 dollars a week, they could have had the floor fixed and pay an exterminator come to kill the bugs. Yet, they had to have a big screen TV.
ReplyDelete12:02 that is crazy! Omg morbidly fascinating. Ppl nowadays....
ReplyDelete