Shopping at Rent-to-Own Stores Will Cost You Much More 

Everyone likes a bargain. People also like to have the newest and best appliances, furniture, televisions, computers and game consoles.

One way some people choose to get those things fast is at rent-to-own stores. They think all they have to do is pay a small amount of cash each week for the rental, and soon they will own the same name-brand items as those found in regular department or furniture stores.

The bad news is that the items from rent-to-own stores end up costing as much as five times what you would have to pay for them in a regular store.  The payments often become too much to handle on top of other bills.  And it is not uncommon to lose both the item and the money put into the rental.  Some buyers find themselves deeper in debt.

Student calls rent-to-own a “rip off”

Amber Brown is a Milwaukee Area Technical College student.  Her partner used a rent-to-own store to buy a television. Brown described the rent-to-own deal as “a rip-off.”

“He wanted a television, and we were really poor,” she said. The story did not end happily. Her friend paid about three times what it would have cost to buy the same item at a discount store. He found himself owing much more.

“They (rent-to-own stores) exploit poor people or people who are in desperate situations and can't get credit,” said Brown. 

Brown said that people who use rent-to-own stores often do not have the self-discipline to save money. But, she said, if they knew the real cost of rent-to-own stores, they might try to do things differently.

A $200 TV costs $700 from rent-to-own

For example:  A television at a rent-to-own store might cost $8.50 per week for 78 weeks (19 months), plus a final payment of $37.  Those terms seem easy to manage.  But with those terms the TV actually will cost you $700.  Buy the same model at a department or discount store, and the total cost will be about $200.

Another drawback of rent-to-own stores is that they might be selling you a used TV instead of a new model.  You will still pay $700.  Also, if you miss a payment on the rental, the contract can be cancelled.  Any money you paid will be lost, and the store will take back the item.

A better plan would be to put $8.50 per week in a locked box at home, or deposit it into a bank or credit union account. By saving $8.50 a week, it will take about 23 weeks (six months) to save the $200 to buy the TV at a regular store.

Other uses for rent-to-own

One good use of rent-to-own stores is to try something you may be thinking about buying for a week or two.

If you know what you want, shop around for the best price at stores like K-Mart, Target, Kohl's or JC Penney's.  Then save for it.   You might also find bargains on the items you want at garage or rummage sales, and at second-hand stores.

By Amy Waldman, Coordinator, Project ACCESS, Milwaukee Area Technical College