Rent to Own Stores & Instant Gratification

Buy This $300 TV for ONLY…… $700?

• 2.3 percent of U.S. households had used rent-to-own transactions in the last year, and 4.9 percent had done so in the last five years.
• Seventy percent of rent-to-own merchandise was purchased by the customer.
• Seventy-five percent of rent-to-own customers were satisfied with their experience with rent-to-own transactions.
• Merchandise purchased from the rent-to-own store was rented for an average of 14 months before being purchased, with 47 percent being purchased in less than a year.
• Nearly half of all rent-to-own customers had been late making a payment (via)

It is amazing how in our desire to achieve the “American dream” we have lost our patience and become blind to reason. Instead of saving for an item, looking through 2nd hand stores, curbside cast-offs, friends or doing without, we have found ourselves in a position where we sell our ourselves to the first person who can give us what we want. NOW!

Rent-to-own stores are the answer to this impatient blindness. If you are waiting on furniture to come in from a move and need something for company, I can see renting tables and chairs for the week you need them. But that is not the intention of most people who walk into RTO stores. People go in because they don’t have enough money saved or their credit isn’t good enough for the local furniture store. Unfortunately, they suffer for this decision.

Here are the options for your TV
Option 1:
Save $300 and go to the local big box store to purchase. No extra money. If you are lucky, you can pay layaway for a few months. But there are no extra charges.
Option 2:
8.50 a week for 78 weeks (18 months)
Plus an additional down payment/processing fee/delivery of 37.00
A total of 700.00

You can certainly pay more than the amount; however, most is still broken down by the week, so you are just paying the same amount. Meaning, your money doesn’t go toward principle, but to pay the full $700 you agreed to.

Sadly, when people walk into these stores, they are only looking at the weekly/biweekly or monthly amounts they have to pay and not the full amount they have paid over the long haul. I can recall going into one such store with some friends and they saw a cool couch they liked for only 23.75 . I had to bring up the fact that they would be paying almost 95.00 a month and if they just saved that amount each month for 5 months, they could buy a brand new one for elsewhere, whereas, they would STILL be paying on the sofa long after.

Something to also keep in mind is that not all items are brand new, sometimes you get used items, repossessed or wholesale, low quality items. If you do your math, you will thank yourself for holding off and not giving into the desire for instant gratification.