JLP over at AllFinancialMatters checked into renting furniture to own with Rent-A-Center. For a sofa and loveseat with a retail price of $1,048, a renter would pay $26.99 per week for 104 weeks, adding up to a whopping $2,806.96!
Although this is renting-to-own, it is still an extension of credit, similar to a contract for deed in the real estate world. In either case, you get something you haven’t paid for and, more importantly, do not have an ownership interest in. If you stop paying, Rent-A-Center gets your money paid so far as well as the furniture. The wisdom of this is, of course, dubious from the get-go.
In this case, it works out to a 122% APR. That kind of makes Rent-A-Center the payday lender of the furniture world. As JLP points out, you could sit on the floor instead and own that furniture outright in only 39 weeks. No savings account? Coffee cans buried in the backyard aren’t a bad idea. — SAM GLOVER