Rent to own centers will tell you that everyone ‘deserves’ an easy, affordable way to get the newest brand-name merchandise. How affordable is it really? Let me show you the true cost of renting to own an major appliance…
I called Rent-A-Center (RAC), one of the most well-known rent to own agencies, and asked about rent-to-owning a new clothes washer. I specifically said that I would just need a basic model, and asked for a price quote. First he tried to sell me a dryer to go with that, and then offered me a decidedly not ‘basic’ super-duper front-loading top-of-the-line model.
I forgave him for basically being a salesman, (and a pretty smooth one really), and repeated my request for a basic clothes washer. He said they run from $10.99 to $13.99 a week, for contracts from 68 to 77 weeks long. Hmmm…lets do some math!
The lowest priced model ($10.99/week) at the shortest contract term (68 weeks) would come to $747.32, plus tax. The higher end ($13.99/week) for the longest term (77 weeks) would work out to $1,077.23, plus tax. Yikes!!
Considering that I can buy a basic model new washer outright for $200-300, I’d be paying the price for two or three new washers! So what do I gain buy renting to own? According to their website, I can experience all these ‘benefits’:
* Name brand merchandise
* Free delivery
* Maintenance included
* No credit card debt
* Affordable
Well, let’s take a look at the real value of those benefits…
Name brand merchandise ~
Can you even buy a non-name brand washer? Where would I do that?? Is there such a thing as a ‘store brand’ clothes washer? Boasting that it’s ‘name brand’ doesn’t feel like a real benefit.
Maintenance included ~
First off, what maintenance?? This is brand new name brand equipment they’re selling. It’ll be paid off in just under a year and a half. How much can go wrong in that time? If it does require maintenance that quickly, it should be covered under warranty anyway. An outright purchase of a new washer would typically come with three to five years worth of warranty standard, so offering 68-77 weeks of free ‘maintenance’ while I’m renting-to-own that same equipment sounds pretty hollow.
Free delivery ~
Now this is just silly. Who doesn’t offer free delivery with the purchase of a large appliance?? It’s hardly a cash-and-carry item. (‘That’s a real nice top-loader you picked out today, Mrs. Johnson. I think you’ll enjoy it! Will that be paper or plastic?’) Frankly, I expect it to be not only delivered, but also un-crated, and pushed into approximate position. If the guy hooks up the water lines and starts the first load, I also tip nicely!
No credit card debt ~
Maybe. Or maybe not. They never mention too prominently how you should pay for that $747.32-1077.23, do they? Turns out, Rent-A-Center takes credit cards. They don’t make you pay the whole amount up front, but saddled with the possibility of losing their ‘investment’ many people will resort to using credit cards to pay off their contract with the rent to own store. Now imagine paying up to 29% interest on that $1077.23. Double-yikes!!
First I have to drive into town to the laundromat. That will cost gasoline if it’s special trip. But I’m in town at least once a week already, so I’ll just do it while I’m there. No cost so far.
Laundry soap and/or fabric softener and/or anti-stain products will cost the same as they would if I used them at home. Still no cost so far.
I will need quarters for the laundromat washing machines. How many? Well, that depends on where you live, since it varies a lot by area. I’ve seen it as low at 40-cents a wash, and as high as $2.75 a wash, for the standard size load. (Keep in mind that that covers the electricity and the water to run the machine as well, an expense I’d have to pay for if I washed at home.) The two laundromats closest to me are $1.00 and $1.50. I’ll average them and say $1.25, okay?
Now say we wash two loads a week. That’s $2.50 a week, (and no tax!), compared to $10.99 to $13.99 (plus tax, plus water, and plus electricity) for an ‘affordable’ machine at home. Huh?? What’s extra ‘affordable’ about that plan!?
A better alternative:
Start by setting aside the total needed for the $10.99 plus tax rent-to-own machine each week, call it $12 even. Take out the $2.50 needed to use the laundromat. That leaves $9.50 each week. Put that $9.50 each week into a piggy bank. (Don’t get fancy with Christmas Club bank accounts, or even piggy banks shaped like a real pig. Just grab an empty mayonnaise jar and use that.) In 22 weeks you’ll have $209, and in 32 weeks you’ll have $304. Then you can take your mayonnaise jar to the local appliance store, and pick out your new clothes washer.
In just a fraction of the time of a rent-to-own contract, (and for just a fraction of the cost), you could be enjoying your very own, fully paid for and delivered, name brand clothes washer with a warranty, in your own home!
Go grab a mayonnaise jar.
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