Here’s a perfect example of what a ripoff rent-to-own or “lease-purchase” (to use the Kelly’s phrase) arrangements are to the consumer. This $250 Wii console can be yours for only $79 a month, and after 12 months, it’s yours to keep. By that time, you will have paid $948 for it. By comparison, if you charged it to a credit card with 18% interest, you could pay $23 a month and have it paid off after 12 months. Kelly’s offer will cost you $673 more than paying with the credit card.
From the Kelly’s website:
What distinguishes lease-purchase from a retail credit sale is that there is no interest charged to consumers, no credit is needed, and customers can return the merchandise at any time. This no-obligation, no-debt feature is the cornerstone of lease-purchase.
That’s right, if you decide you can’t make the payments after, say, three months, you can just give the Wii back and not worry about it anymore!
Or, you could stay the hell away from Kelly’s, Rent-A-Center, and similar places and just put $79 in an envelope for three months, then go buy the Wii with cash.
(Thanks to Matt!)
RELATED
“Rent-A-Center More Like Ripoff Center”
More From Consumerist
-
All You Have To Do To Live Rent-Free For 6 Years Is Go Without Gas & Hot Water
-
Listen, AT&T: I Am Sick And Tired Of Hearing From The Nonexistent "Kelly"
-
NYPD Planning To Bait Prescription Pill Thieves With Bottles Containing GPS Trackers
-
6 Things You Can Learn From YouTube Hit “Thrift Shop” Without Having To Listen To It
-
My Landlord Raises Rent 1 Penny To Make Up For Postage Increases, Sends Letter To Tell Me
@shadow735: They are dickheads becase they are going and buying all the supplies early so that your average person has no chance of getting any. It’s not just about getting up early and braving the cold, it’s about having connections at the retailer so you could split the profits with your inside man in response for information that will help you scalp.
You could just buy a Wii on ebay for 400 dollars and pay with paypal, which in turn pulls money from your credit card. Then you can still make payments while avoiding the ass rape.
They are just taking advantage of the Wii short supply. Because of them snatching up the ones they are renting out at inflated prices, (not much different than ebay in retrospect) People couldn’t buy them at retail locations for a far better final cost.
@riverstyxxx: As InfiniTrent and Islandkiwi: have both said, these places take advantage of the pocket of people who aren’t the most educated, while being the most poor.
I know some people who HAD TO HAVE a Wii and instead of waiting for a few months, or being vigilant and watching local stores, they bought one off Craig’s List for $600 + dollars. Basically, the effort of making some phone calls, watching Wii Tracker wasn’t worth it, so they spent a week’s pay. Some people have compulsion problems.
I hate the fact that I have to walk into Aaron’s all the time to fix their Dell rental PCs. The prices are grossly inflated compared to what you could get if you saved that amount of money up and in the future bought the computer straight-up.
Why do governments make interest on this scale illegal? I don’t think anyone should be allowed to charge more than 10% over the rate of inflation.
I’ve been supplementing my income by buying a few here Mexico and when I go visit my folks back in New Mexico my kid cousin already has a couple of “buyers bidding for the goods”
Once my folks made it into something like a finance class for the kids, made it like an auction and told them it would cost them to enter the bid an all that. The only money that was not returned was from the guy that won the auction. That was the most expensive Wii I’ve ever heard about.
@coold8:
how do you like your kindle?
Not to rain on anyone’s crazy parade here, but doesn’t the picture look like it includes more than just the Wii?
It looks like it is a Wii gaming system with an LG flatscreen TV.
While rent-to-own is ridiculous; I think everyone commenting here as been taken for a ride.
The great thing about a Wii is if you bought one at launch you could have played the heck out of it (use a rental service for games), sold it for more than what you paid for it, and then you would have only been out 20-30$ for a month of rentals from the video store. In fact due to the fact that you would have been able to sell it for more than what you paid, you probably wouldn’t have lost any money at all. That is if your store had a decent amount of Wii rentals in stock. Its a little harder now to sell Wii’s since people mostly go for sealed ones and used ones fetch a little less. Given the fact that most of the games on the Wii get boring very fast, this would have been a very good idea. Most people I know that have a Wii don’t even turn it on after 2 months. The novelty just wears off so fast.
It does not include the flatscreen. The flatscreen is $159*24 months. So $3816. Full scan of the ad is here.
[flickr.com]
To play devil’s advocate, I’ve known several people who have used these kinds of places as a quick “no down payment” way to get a house full of furniture. I’ve watched also as a few of them decided to renege on their promises and either destroy said furniture before returning it, not paying for many months, or in too many instances, simply stealing it and disappearing. The rent-to-own shops might be the furniture equivalents of payday lenders, but they have the same massive problems with fraud as well.
When you’re dirt-poor, you’ve had nothing and can’t see yourself every having anything, don’t underestimate the power of stepping into one of those places and seeing all the furniture and electronic gear set up so beautifully, wishing that was your home, and then seeing a price tag that somehow actually fits within your minimum-wage budget… It’s easy to say you won’t sell your soul for a couch, but then most of us here probably never had to use cardboard boxes and trash-soaked crates for furniture without the mental ease of being in college or simply knowing that someday things would be better because we came from something better.
I bought a TV at Aarons recently.
It was a previously-leased 61″ HDTV, marked down from MSRP of 2699 to 1799. Total lease/purchase price would have been just over $5000….
…were it not for the fine print. I’m not sure how it works at other rent-to-own money farms, but at Aarons, you get 90 days same as cash. My somewhat specious credit wouldn’t let me get a credit card with an offer like that, and here’s a sketchy lease showroom doing me a favor.
Luckily, I have plenty of actual money these days. Two $900-ish payments later, the TV is mine free and clear, and I watch basketball in glorious HD while savoring the inner glow that only comes from getting a good deal from a ripoff artist.
El_Dusto,
That’s amazing that they do that. Congrats. I don’t think they are necessarily rip-off artists. So long as they are open with their terms and don’t fool people, they are running a business. Granted, it’s one a lot of people don’t like, but then again, I don’t like stores that sell nothing but NY Yankees memorabilia. Doesn’t make them wrong.
as a kellys wii system owner, i am proud to say that they $950 is well worth it. We also purchased WiiPlay for $34/mo for 6 months and Resident Evil 4 for $56/mo for 12 months. sure, it ended up around 2K for 2 games and a system, but hello!!???! rent-to-own!! yeah!!! availability???!!! yeah!!! the best part is that my system had been previously rented, so it had a wonderful yellowy-nicotine finish that you cant find in stores. also, there was a mii already on it named “Whopperz Jr.”
Granted, it’s been a while since I’ve searched for a Wii, but if you devote some good time into it it shouldn’t be too hard at all. When I got mine last year I only spent a week or two looking.. calling up all the local GameStops, etc. and using the Wii Tracker. I actually called and found one that my boss ended up getting right away, and got mine the wknd after at a different GameStop after waiting a couple of hours on a Sunday morning. Maybe I’m just lucky, but it seems ridiculous that people are waiting months and months and paying hundreds of dollars more to get one.
@The Bigger Unit: Judge Mathis, king of all judge shows. And the perfect cure for when your own self esteem runs low.
It’s true that we need to start educating kids in school about buying on credit, or making payments by ways of taking out loans. Once they realize how much they’re being ripped off, we’ll become the most frugal country in the world.
However, this payment plan for the Wii is simple math. If you can’t multiply $79 by 12 months, then there’s no help for you.
I didn’t bother reading all the comments, but I’m sure this has been beaten to death like a dead horse:
GOOD luck finding a Wii in a retail store!