Rent to own customers often assume that they are saving money by paying for items on a weekly or monthly basis. The truth is, rent to own appliances are a pricey bargain. Customers can easily end up paying two to three times the cost to purchase an appliance outright from a traditional store. On the other hand, there are benefits to renting appliances, especially if you don’t have the cash to pay full price at a traditional retailer.
The Benefits of Rent to Own Appliances
If you need a new or replacement appliance, but you don’t have the money for an upfront purchase, a rent to own appliance is a great alternative. The lure of rent to own stores is the ability to walk away with a new appliance for relatively low weekly or monthly payments and no credit check. For someone who doesn’t have enough credit to finance an appliance at a regular retail store, this may sound like a good deal.
If you no longer need or can no longer afford a rented appliance, you can return it without penalty or damage to your credit score. Most rent to own centers will pick up items that customers decide they no longer need. If you fulfill your agreement by making all of your payments, you will own the item when your term ends. Some rent to own companies offer same-as-cash options for a certain number of months into the rental agreement. During this time, you can buy the rented appliance at a price reduced by the total rental costs you’ve already paid.
The Drawbacks of Rent to Own Appliances
For anyone who is saving money, rent to own appliances are not conducive to finance goals. Rent to own stores make their money from charging interest on rented items, and interest rates can reach as high as 275 percent on certain items. On top of that, hidden fees drive up the costs of renting appliances even more. If you are late on a payment, most rent to own companies charge a late payment fee to restore your rental agreement. If you decide to return the appliance, some rent to own stores will charge you a repossession fee on top of the late payment fee.
If you can delay the purchase of a new appliance until you have to purchase it from a retail store, you will save more money in the long run. If you have no other option than to rent appliances from a rent to own store, do yourself a favor and run the numbers before you agree to any terms.