About Rent to Own

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    Function

    • Rent-to-own companies provide consumers with less than perfect credit who are on a budget the opportunity to purchase merchandise they want. Furniture, electronics, jewelry, vehicles and appliances are available. Instead of doing a credit check, a rent-to-own company checks your employment status, verifies your address and asks for references. You can opt to pay most rent-to-own companies weekly, biweekly, semi-monthly or monthly.

    Misconceptions

    • Many people stay away from rent-to-own stores because they think the merchandise is overpriced. If you consider the cost of interest that accrues on a credit card purchase, rent-to-own merchandise is reasonably priced. In some cases, rent-to-own merchandise is a better option than purchasing something on a credit card or financing it through traditional finance companies because you can return rent-to-own merchandise at any time without it affecting your credit report.

    Benefits

    • The main benefit of renting to own is that during the rental term, the company from which you are renting the merchandise is responsible for keeping the item fully functional. For example, if you are renting a refrigerator and it stops cooling, the rent-to-own company has to fix the refrigerator or give you a comparable replacement. Another benefit is that you can purchase rent-to-own furniture on short notice without it affecting a budget too much. This is useful if your washer stops working and you need another one quickly.

    Types

    • There are two main types of rent-to-own merchandise, new and used. New merchandise is usually a lot more expensive and will be placed on a longer contract. Used merchandise is usually a little less expensive since it has already been rented to someone else. In some cases, such as with mattresses, buying a new mattress is advisable due to health concerns. With other items, such as electronics or appliances, used merchandise may be worth checking out. Many rent-to-own companies also sell merchandise for cash at competitive prices.

    Time Frame

    • Rental times vary from item to item with many rent-to-own companies. The more expensive items may be put on a 24-month or 36-month contract, and less expensive items may be put on a six-month contract. Many rent-to-own companies give you the option to pay a same-as-cash price within the first three to six months of the contract, depending on the company's policies.

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