You most likely have seen or heard commercials touting the benefits of shopping at rent-to-own (RTO) stores, like Aaron’s and Rent-A-Center.
Believe it or not, RTO shops have certain items that you should consider or avoid. The idea behind these businesses is that they rent you an appliance, electronics, or other household items, until you pay them off. You then get to keep the item. That sounds great, right? Why isn’t everyone doing this?
There are obviously some reasons why these places haven’t put big box stores and banks out of business. RTO shops usually have a very high fee for their services. Not to mention that if you default on the ridiculously high weekly payment, they take back rented items from you. That is embarrassing, not to mention hurtful because you lose all that money you paid into renting to own that product.
It isn’t the best deal in town to RTO items, but if you are one of those people who these shops target, the ones with less than perfect credit and no money saved, then you probably will find yourself signing on the dotted line. Young people often have nowhere else to turn when they need basic household appliances. Most people experience these RTO shops just once.
How naive are you to agree to such terms for something you need? Maybe you are in one of these agreements now? Let’s hope not.
What Do I Get?
If you find yourself desperately needing an appliance and you have your heart set on renting to own something to fulfill that burning desire, you will end up paying a lot more for something than you should.
At least consider the items that benefit you the most. Electronics are likely to be the items that you should only consider renting to own. Honestly, any items with smaller price tags are the only items that a person should even think about agreeing to rent to own.
The higher the value of the item, the more you are going to pay weekly, and the more you are going to pay on top of the original price of the item. Understandably, not everyone can go buy a laptop for school or work, so getting a computer from an RTO shop is one of the best items you can get.
What Not to Get
Try and stay away from things you don’t need. Most of these RTO places have things most young people desire, like car stereos, speakers, subwoofers, and other items that aren’t essential to live life.
They also are very focused on advertising all their appliances that people can RTO. It seems like a sweet deal at first. It is just like financing, but you don’t need good credit. So yes, that is great! Wrong. By the time you pay off that appliance, you likely have paid 1 ½-2 times the original price of the appliance. If you RTO a fridge for $1,500, you end up paying $3,000 by the time your agreement is paid in full. The more expensive the item, the bigger the fee to “rent” the item. You then have a bigger chance of defaulting on that agreement, which results in a repossession and a whole lot of lost money.
If you use these RTO places, get the cheapest unit they have of what you need. Ask them if they have old products that have prices that are much lower than the new, brand name products. Be careful, they absolutely try and sell you the best and most expensive model they have in stock. It isn’t much different than a car dealership.
Is There a Compromise?
If you want to shop smart, then no, there isn’t a good compromise. If you fully understand the risks that come with these RTO agreements and you feel like they are worth it to you, then you should get the biggest, best model they have available.
You must understand that you will pay for it dearly. If you have nowhere else to turn and you need the products fresh off the truck, then no one will stop you. If you are going to be had, you may as well get something amazing in return, right? No one will blame you for that.
In all honesty, the best and smartest thing to do is avoid these RTO places altogether because they take all your money if you let them. You would be much better off using that extra money fixing your credit and becoming more of a respected borrower.
If you absolutely need an item in a very short amount of time, try and look toward the future and plan accordingly. You can save quite a bit of money with responsible saving practices. There are thousands of resources for anyone to utilize on the Internet that are designed to help you save money and make smart spending decisions. Your wallet and your family will thank you for it. What do you need at the moment? How are you going to get it?