Companies that make their money by offering rent-to-own (RTO) services rely on people who cannot afford to buy appliances outright and usually have less than perfect credit.
There are a lot of places that are affordable and trustworthy, but most RTO stores are full of wishy-washy, flim-flam scammers who add on an atrocious fee for their services. The prices of some of the items they offer, such as appliances, can be raised as much as double the original price. For people who need washers/dryers and other appliances, they need them to work properly for a long time. So, they are willing to pay whatever they need to because they have nowhere else to turn.
RTO is an unfortunate market that is still largely unregulated. However, aside from the bad places that you should avoid at all costs, there are some reputable places that give you great, brand name appliances that you can trust, for a reasonable cost.
The situation people find themselves in when needing appliances and other household items have them turning to RTO places more every day. That is why it is so important to know if you are being taken advantage of or not because renting to own something shouldn’t cost you your life savings or entire paycheck.
Yes, there are some pros to shopping at RTO stores. The reputable ones have an awesome selection of new, brand name household items and appliances to choose from.
If you are going to sign a RTO agreement, make sure you get the best products because you are going to pay more for them vs. buying the products outright. You also only pay weekly, biweekly, or monthly, depending on the place and their policy.
Obviously, buying a product with a card or cash is going to actually save you money because it isn’t being financed or having fees tacked on, even though you are dishing out a larger sum of money.
But, some people just don’t have a few thousand dollars sitting in the bank waiting to make the journey into someone else’s account. So, using one of RTO places is the alternative option, and mostly because they let you RTO with bad credit. That is mainly the reason people even use these businesses. Getting a loan from a bank or credit union would certainly be less expensive.
Plenty! Especially if you happen to find yourself at the mercy of a scam artist (salesman) at a place that is less than reputable, and he is talking you into buying a washer/dryer set for thousands more than they are worth.
The main con? Paying double for an appliance you and your family need. What’s more, is that you not only need it, but you need a good running unit that has necessary features. As a result, the price goes way up.
They capitalize on your need for a good appliance and the fact that you have nowhere else to turn. Paying a large sum out of every paycheck eventually gets old real fast. Especially if you find yourself paying it off for a year or more.
RTO stores also let you RTO multiple appliances and items, which people think they can afford, but then having to default on the payments. They count on defaults because they get the items back without giving the money back that you paid to rent them. They then rent out the items again, hoping for another person to default. The cycle continues through all those unfortunate people.
What are the Rules?
All RTO places are going to have different rules. There are some that are standard throughout the industry though. They require you to have a job. They ask for check stubs dating back however many months are required to adhere to their policy. It may be just three months, or it may be a year, it varies. They need your personal information, including your social security number, address, driver’s license information, value of assets…the list goes on and on.
Once they verify that you can afford and pay the weekly payments, they arrange for either a delivery or have you take the item from the store. They have you sign an agreement stating that you will pay a certain amount of money for a period of time until the agreement is paid in full and all requirements are met.
Other rules may apply for other places, but the bottom line is that you need to be able to pay a big bill every week for the duration of the agreement. There are also rules for default. They likely have a clause in the agreement that states that the rented products will be repossessed if you default on the agreement. This means that all that money you gave them goes in their pockets, and you embarrassingly have the product taken from your home.
The best thing to do is avoid RTO shops altogether. If you have nowhere else to turn, at least try and find a place that is reputable and won’t take you for a ride. Do your research before you go and sign on the dotted line.
Have you ever shopped at an RTO store? If yes, was it worth it or not?