Avoid the Rent to Own Scam

rent-to-own-scamMany specialty stores offer “rent to own” programs. If you don’t have the cash to buy a television or a couch, you can pay a weekly fee and rent it, and once you have paid for a long enough period, you own it. That’s why it’s called rent to own. But in reality it is a very expensive form of debt.

Renting items make sense if you only need something for a short period of time.  If you are transferred to a new city for three months, and you rent an unfurnished apartment for three months, renting your furniture for three months may make sense.  At the end of the three months you simply give the furniture back, and owe nothing.  Renting may be cheaper than staying in a hotel for three months, so it makes sense.

Unfortunately most people who “rent to own” do it for a year, or two, or more, and during that time they actually pay a lot more for the item than they would have paid to simply buy it themselves.  In most cases renting for more than a year will cost you a lot more than the original cost of the item.

Before you do a rent to own deal, do the math.  Go the the rental store and pick out what you want, and get an exact quote on the total rental price.  If you will rent to own for two years, multiply the weekly price by two years (104 weeks).  Then, go to a department store, or specialty store, and find out what it would cost to pay cash for the item today.  You will probably find there is a significant savings by paying cash.

If you don’t have the cash, start saving.  It’s better to wait a few months and pay cash, than it is to rent today and pay far more in the long run.

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