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Rent-To-Own can cost
five times more than retail
credit card, a loan or old-fashioned
savings account will save you $$$.
about making a rent-to-own purchase? You may want to reconsider.
Despite invitingly low weekly or monthly payments, rent-to-own
customers can end up spending two to five times more than retail.
Additional fees built into the transaction could result in
consumers financing their purchases at triple-digit rates (Bankrate.com
Although renting to own costs more,
buyers with uncertain financial futures find that rental contracts
allow them to keep their options open. According to a recent
Federal Trade Commission survey, 59% of such customers have an
annual income of less than $25,000.
the contract carefully
considering a rent-to-own agreement, read the contract carefully
and check the fine print. Understand exactly how much the payments
will be and whether or not the figure includes tax. Ask if there
are add-on fees and if so, what are they and how much? Find out
when payments are due and what late fees will be incurred.
The contract also should determine
who is responsible if the merchandise is broken, lost, or stolen.
One of the advantages of renting to own is that if the merchandise
turns out to be faulty, the store is obligated to provide a loaner
while fixing the original. In general, get all promises or
in writing, since the written word is binding.
Consider other options
Instead of going the rent-to-own
route, other options for consumers on a budget include charging
the merchandise, (even a 26% annual percentage rate--APR--is
cheaper than renting to own), investigating a credit union loan,
or using the old standby: saving for a desired item.
(Source: Credit Union National Association)
Consumer Federation of