or years, critics of rent-to-own have targeted the industry’s prices as the primary negative aspect of the business. What those critics fail to acknowledge is that rent-to-own doesn’t simply offer new, name-brand products. With every transaction, customers receive unparalleled service, flexibility of payments and no obligation to buy (or acquire the responsibility of credit payments). Take a look at what the consumer receives when renting to own:

No obligation
     Rent-to-own customers are never obligated to make the next payment. No other transaction in the marketplace provides the consumer the option of continuing payments or returning the product without penalty or damage to his/her credit. In fact, industry statistics show that only 25 percent of customers rent a product until it is owned. The significant majority of customers return the product within three to four months or exercise the early-purchase option.

• No long-term obligation
• Terminate the agreement at any time for any reason
• Never incur debt
• Credit is never extended
• Credit checks are never required

Flexibility of payments

• No other transaction allows the consumer the flexible options on making payments.
• Weekly, bi-weekly or monthly payments—the customer’s choice
• Early-purchase options—offering significant price reductions
• Re-instatement rights. If a customer has to return a product for any reason during the payment cycle, rent-to-own companies will re-instate the payment history when the customer is financially secure again. Re-instatement rights are governed by state law regarding time limits to re-instate rental payments. The majority of rent-to-own companies offer lifetime reinstatement for products.

Unparalleled service
     No other transaction in the marketplace offers the full product service that rent-to-own does. If a customer buys a product on credit at a retail outlet and that product breaks after the warranty has expired, the customer is responsible for repairs, even if he/she is still making payments on the credit sale. In rent-to-own, product repair and service are the responsibility of the rent-to-own dealer—regardless of the warranty on the product—during the period in which the customer is making payments on that product.

• Delivery, set up and pick up are all included in the rent-to-own payment
• 100 percent service on the product while making rent-to-own payments. Rent-to-own service is still guaranteed after manufacturer’s warranty and extended warranties.
• Loaners during repairs—the rent-to-own company will provide a replacement product while the product is being repaired.

Rent-to-own pricing: it covers more than just the product
     Many rent-to-own companies are offering competitive cash prices and lower payment terms, as well as early pay-off options. Rent-to-own is becoming more competitive with retail, yet is debt-free and does not negatively affect a consumer’s credit. If a customer makes weekly rent-to-own payments for the full two years, then the customer will pay much more than retail. But paying more through a weekly, no-debt, risk-free, full-service transaction is standard in American market economics. A consumer pays more for a 30-year mortgage than a 15-year mortgage. A consumer pays more for a year’s worth of daily newspapers from a machine rather than through a yearly delivery subscription. He or she pays more to use a laundromat rather than using a washer and dryer in the home. A consumer pays more paying the minimal monthly bill on his/her credit card than making larger payments or buying outright.
     Sometimes in the American economy, you must look beyond the price to determine the value. The value of rent-to-own is its products combined with its service, flexibility and no-obligation transaction—and that adds up to value for the price.
     Because rent-to-own companies offer full service on products, manage weekly or monthly contracts and manage the risk of renting costly merchandise at a low weekly price, the cost of doing business is much higher than for retail companies. Take a look at the costs and profits of rent-to-own’s largest companies, Rent-A-Center and Aaron’s—and compare them to other publicly traded companies. As publicly traded companies, they are required to post their financials.

The rent-to-own niche
     Many customers use their rent-to-own payment history to help establish credit for home ownership and help acquire a credit-worthy status. In fact, national credit scoring companies FICO and CredCo now use rent-to-own payments as a part of their credit.
     Rent-to-own fills a valuable economic niche in the marketplace and research indicates that it is used by a wide variety of consumers—from college students and military personnel to those who must relocate often or those who simply want the latest and greatest wide-screen television for the big game this weekend. Yes, you pay more for rent-to-own. You pay more because you get more from the transaction. And in today’s economy, market dynamics are driving rent-to-own prices down while keeping the same valuable services retail cannot provide.