If you are considering whether to rent-to-own a consumer product, think about the costs of making what appears initially to be small weekly payments, and whether the offer meets your family budget, or is a good deal for you. Take a calculator with you and read the rental agreement carefully. Even at national name-brand stores, you may discover that a modest TV that you could buy at Walmart for $300 could cost you four times that amount by renting to own over an 18 month period. Some interest rates on these rent-to-own agreements are over 200 percent!
Does the contract forgive a missed payment or allow you a grace period to make it up? Or does it allow for repossession with no credit for any payments already made? Are the consumer goods ‘new’? or are they ‘used’? Quite a few consumers feel ripped off, simply because they did not realize the impact of those low weekly payments over time, or the huge amounts that they’d pay for rent-to-own, over traditional purchases.
The NC Attorney General’s Office suggests that before you decide to rent-to-own, ask yourself the following questions:
Is being able to return the item after using it worth paying more than double in rent what it would cost to purchase the item?
How does the cost and terms of renting-to-own compare to other payment options, like layaway or installment payments?
How does the amount you’ll pay weekly compare to the total cost of the item?
How long must you make payments before you own the item?
How much would you pay for the same item if you bought it someplace else?
Is the item new or used?
If you have a complaint about a rent-to-own contract, contact the AG’s office for help or call toll free within North Carolina at 1-877-5-NO-SCAM.