While rent-to-own stores can be great to fill a short-term need – such as a big-screen TV for the big game – actually renting until you own the product can be costly.
If ownership is your goal, you’ll be better off saving the money, using your credit card, or getting a short-term loan from your financial institution and buying it outright.
For example, a 50-inch TV that can be purchased online or in a store for around $480 can cost significantly more at a rent-to-own store – anywhere from $900 on a 90 day same-as-cash deal to about $1,800 if you make monthly payments.
That means the cost ranges from almost 2 to nearly 4 times the in-store purchase price – money you could be saving or using for other needs.
What should you do?
There are a variety of options …
- If you put about $20 a week into a savings account you’d be able to buy that TV in about 6 months
- You could look into the possibility of a personal loan from your financial institution. While there would be interest costs, it would be less costly than a rent-to-own option.
- You could use your credit card, but keep in mind that the faster you pay off that bill, the less you’ll pay in interest costs.
- A retailer might even offer a 0% financing option, but make sure you know the terms and can fulfill your responsibilities. Often a missed payment or not having the balance completely paid off by a specified date will result in a much higher interest rate being applied to the entire length of the loan.
Just keep in mind that renting to own can be great for a short-term need, but it could be quite costly in the long run.
You’ll be better off saving your money, finding a great price on a product and paying it off.