I don't get it. For $99 you can OWN a small television. Why the hell would you rent a big one instead of owning the small one for 8 - 12 months and buying the big one?

Oh wait, I think I just answered my own question...

For a lot of people who make these kinds of deals, it's partly greed and it's partly about being uneducated in financial matters.

Logic goes out the door when people think they can have something right now, instead of saving and waiting. People start getting greedy and want what they can't have, and these places take advantage of that greed.

And when these people walk into the rent-a-centers and rent-to-own centers with their $100 to plunk down for a $800 TV, they still don't understand the ramifications - they're still greedy, and they probably don't understand what that 15% interest rate and fees will do to the money they're paying. Most likely, they are simply uneducated in basic finances, and don't understand what they're agreeing to.

I don't have sympathy for anyone who lets greed overtake common sense.

instant gratification, weee

@pecan 3.14159265: I also would throw in, "taking the easy way out".

@shepd:
Same reason some people put $5,000 rims on their $500 POS-mobile.

I looked into renting (but not renting to own) a VCR during a long-term business trip many, many years ago, thinking it'd be dirt cheap and not wanting to have to fly with a big, bulky VCR at the end of the job. Nope. Two months of payments was more than the value of a VCR (I opted to spend my time on dialup internet instead).

There's one thing that's a positive for rent-to-own people, though, and even though you're paying a huge premium for this positive, it's still a positive: If you don't want the item any more, they'll just take it back. You can't do that with things you buy for cash or with a credit card (well, Sam's is pretty generous, but you know what I mean).

@pecan 3.14159265: Saying that it's greed makes it sound evil. It's more like most of us can't handle delayed gratification, no matter what it is. We live in a get-it-now society where saving money is a last priority for most.

@italianscallion33: It's greed, pure and simple. You want, want want, and when you don't have the money for it right now, your thoughts turn to "how can I still get it right now?" instead of, "what is the best approach to getting what I want in the future?"

I don't see how blaming society has anything to do with preserving common sense. When someone doesn't have the money to buy a big TV...so either he steals a TV, or rent one so he can "have" it when it is neither ownership nor something earned.

There's an Aarons that just opened up about a year ago near me. My favorite sign in their window: "Like leasing a car, only better" That pretty much sums up their business model.

I think it appeals to the kind of folks who just don't see "the big picture" <--No HDTV joke intended. The kind who know they are in debt, but keep on spending to the limit on their CC's not realizing how much money they are throwing away on interest and "convenience" fees at the end of the year.

@pecan 3.14159265: I actually agree with you. The desire for instant gratification IS a form of greed and/or immaturity, at the very least. And yes, it's a big problem with our society...but it's also a problem with individuals.

It's also emotional decision-making. Rationally, it makes NO sense for a lower-income person to patronize this type of business. Since it's an expensive form of financing, it actually means they will get LESS for their money, which they can spare even less than most people. So part of the problem is people that just make decisions based on their gut feelings this second rather than careful analysis. Society is responsible, partly (advertising is designed to encourage this sort of thinking) but ultimately the individuals are at fault.

As one of my College Professors told me "Poor People have Poor Ways". And let's not forget the wise saying from Fernando on SNL - "It is better to look good than to be good!"

I'm a Bis Sis in the BB/BS program. My Little Sis's household rents their couch from one of these places. They get every kind of public assistance they can find, and then they waste their precious small amount of money so foolishly. They don't keep the couch until it's paid off. They turn it in every so often and pick out another one. Every couch they get looks used, and that grosses me out. I'd really like to tell them they don't NEED a couch, but unfortunately that would be the wrong thing to say.

@pecan 3.14159265: "I don't see how blaming society has anything to do with preserving common sense. "

You CANNOT ignore that our society encourages this behavior. To do so is a bit naive. It's like saying our society doesn't encourage sexism.

@crazyasianman: instant gratification is the reason why our economy is fudged up!

@razremytuxbuddy: Exactly. Nobody NEEDS that stuff, for for the price of 2 months renting one, they could get one on craigslist... hell they could even find one free if they are that desperate. But people who are in that kind of mess are in it for a reason... as soon as they get any kind of help up or money they throw it away

@nakedscience: I agree that society has a part in the behavior, but I disagree that one can simply blame society. Individual decisions factor into it much, much more than people would like to allow, because then it means that someone screwed up.

Regardless of how much society tells me to spend, spend, spend, I decide how I use my money. If I went on a spending spree under the illusion that society promotes this behavior and that it's society's fault I'm spending $5,000 in one day - well I've basically tried to absolve myself of any responsibility, and that's just not how it is. People are ultimately the decision makers, no matter how much they try to pass themselves off as the victims of society's influence.

@razremytuxbuddy: Do you know how much they pay to rent the couch?

I disagree that people don't need a couch. You have to sit somewhere, and I really don't think it's okay for kids to sit on the floor all the time. Unless you have a hotel ballroom's worth of chairs, I think a couch or an armchair is pretty basic.

I'm wondering how much it is to rent one while saving up for one off of say...Craig's List. Or even to buy one from an Ikea? If you don't have $300 or $400 for a really low-end couch on Craig's List, or a little more for one from a place like Ikea (which I understand isn't near everyone), it's probably best to forego the couch until you can save the money for one.

@pecan 3.14159265: I think it's a noble principle, but it's amazing, when you look at cognitive psychology and behavioral economics, how illusory free will really is.

@Crim Law Geek: Good call...say do you know where I can get a hood-sized flag?

@masonreloaded: I think you're basically saying that the family does NEED a couch, but they don't NEED to partake in rent-to-own services to obtain one, right? Cause I'm not seeing how a whole family having a couch (not a fancy one from Pottery Barn either) is a luxury.

"It's expensive being poor."

@pecan 3.14159265: i would probably also throw in there that the sales tactics at these stores are deceptive, therefore most people who are of lower intelligence don't necessarily see how they're a bad thing.

see also: car loans, mortgages, payday loan places, etc

people tend to forget that they are not the dumbest people in our society. there are people who haven't been taught common sense or literally do not have the capacity to understand things like this.

@pecan 3.14159265: I am sorry anyone can figure out that 100 dollars a month for 2 years is over twice the cost of the tv. You don't need to understand anything about interest. There is no excuse for acting like a victim.

@pecan 3.14159265: But...if I can't blame society that might mean I'm just a dumbass instead of a victim. That hardly sounds fair...

@razremytuxbuddy: they probably don't understand what they're getting themselves into. those places are sketch city, with workers who are like used car salesmen.

Rent-a-centres can be useful under the right circumstances. When we lived in Florida we rented everything in the apartment except the appliances. It saved us from having to sleep on the floor while we outfitted the place. Since the contract was only for a year we would have had to dispose of those items (in a pre-craigslist world) before we moved back to Canada, so for us it worked well. Did it cost more than buying outright? Sure, but having lived on the other side of the fence (a town with no place to rent anything so we slept on the floor for a couple of weeks before the moving van could get there), I can say I prefer the side with the rented bed.

So if you want to think of us as stupid and greedy, be my guest.

@pecan 3.14159265: i guess it depends on your definition of NEED. yes its not a luxury, but its not an immediate necessity like food/shelter. if your only choice is between renting a couch right now for $100 a month, or going without for 4 months and saving $400 so you can buy one you can and should wait.

I was lucky enough to get a brand new cell phone number when I moved to Kansas City that was previously owned by someone who leased from Aaron's and owed them money. I got about 5 recorded calls a day from multiple numbers and when I called back, they accused me of lying. To remove me from the list they needed my number and the name of the account it was linked to. I obviously didn't have the name the account was under, so this continued on for a couple weeks until I finally got a call from a live person looking for money and I all but exploded on him (I often preach being kind to customer service people, but I lost it... and Mr. Aaron's Dude, if you are out there, I'm sorry!!!).. but it worked and they stopped calling me.

Now I'm dealing with a sheet metal company that has used my number in their advertising... after Aaron's this doesn't bother me as much.

/rant

@balthisar: Yeah, they'll just take it back and you'll be out all the money you already spent. You can do the equivalent by taking something you bought with cash or a cc and throwing it away.

I had the misfortune of working for one of those shithole companies for a few months and hated every day except the first (because I needed work at the time). Being told to repossess the bed for nonpayment from an invalid is NOT FUN. And the stuff they sell is a second rate but they charge full value for it.

First, they buy stuff wholesale but list the "book value" of it as higher than the retail price one would buy it for. On top of that, the total "price" of the item if paid over two years is three to four times their "book value".

Then, they divide the total price by 24 months, calling it the "monthly rate". If a sucker - I mean, customer - attempts to pay by the week, he actually pays more, losing 2-3 days per month.

If the customer tries a buyout, it is 50-75% of the remaining "value", plus possible penalties. That means if the suc...customer tried to buy out after the first month, he would still be paying more than twice the "book value", and likely many times what the real value of the item is.

And the biggest scam of all: used is new. Items that are repossessed are often relabeled, repaired and refurbished are sold as "new" or their "book value" increased to increase profit; sometimes, stores in the chain would ship old merchandise store to store and then relabel it as "new", with "full value". Products that have been rented for months, sometimes years, and would have long since been depreciated by any reasonable accounting method were sometimes listed as worth more than they were originally rented for.

And if you think that's horrifying, remember that many of these places rent potential hygiene problems such as couches, washing machines and dishwashers. The beds they rent could have anything from bedbugs to having people literally die on them, and all they get is a steam cleaning (IF that) before going back out on "rent".

@Miss_Ingperson: I think that situation is a little different from someone with no credit renting a big-screen TV for two years because they can't afford to buy one right this instant.

This actually doesn't sound all that bad considering how much some of these items (like high end tv's) devalue and break down. It's like leasing a car. The minute you drive it off the lot, it's lost a crapload of its value for resale. Leasing it actually makes sense in those cases. I would argue that high end electronics are even more lease-worthy than cars, depending on the deal you can run. A 2 year old used set is worth small pennies on the dollar.

@masonreloaded: Well, in strict definition of need, food and shelter are definitely need items, while a couch can probably be put off for X amount of time...but to sustain a healthy life, you can't have a home in which you sit on the floor or in a dining room chair for years. There are things that while not being strict baseline need items, are necessary for a healthy and/or functional life.

It's why it's absolutely ridiculous that people rent to own anything at all. There are resources for people to get things at a variety of price points. $99 a month for 5 months is about the cost of a low-end couch on Craig's List. And for people without internet, public libraries are a great resource.

@Miss_Ingperson: You made an informed decision to do so based on your necessity, and you did it temporarily. People renting 50 inch televisions aren't doing so to suit their needs, they're doing it because they want to impress people and live big. People who are under the guise that they can rent to eventually OWN a 50 inch television are doing nothing but harming themselves.

@pecan 3.14159265: Hell $300-$400 bucks is expensive for the couch prices I see in thrift stores. We got our hide-a-bed for less than 50 bucks out of a thrift store, and it works great for what we need it for (aka thing to sit on/sometimes lay on). You have to inspect the furniture pretty well before getting any of it, cause a lot of the times it is either broken or just really gross, but good stuff is out there. And then the money you save by buying a super cheap couch you can put into steam-cleaning the thing. If it's ugly you can drop a few bucks on a slipcover.

Hell I've seen couches for FREE. I've known plenty of college kids who were able to score free furniture from one place or another, you don't have to pay insane rent-to-own fees just to have a couch.

@calquist: Mr. Pi's last cell phone number was previously owned by a very, very popular person and he'd get at least 5 or 6 phone calls a day from this person's friends. He got so tired of saying, "this is not _____'s number" he went to the store and had it changed. I can imagine it's much, much worse when a rent a center calls you.

@pecan 3.14159265: Our couch cost $75 dollars on Craigslist. It was new, but the seller's wife had repainted the room and decided it didn't 'match' anymore. He needed it gone before the new one was delivered, so deal for us!

It's very large and very comfortable.

@korybing: I can't imagine that if you're renting a couch from a rent to own place, that your hygiene standards are any higher than if you went to a thrift store and bought one there. In my experience, couches at Goodwill can range from really bad to really good, and if rent a centers have couches that have been used and reused by lots of people...the selection can't possibly be as good as any thrift store.

I suppose if the rent to own place can deliver the couch, that's one thing, especially if you don't have a car, or know anyone with a large enough vehicle.

It's still to bad that you are forced to rent / lease the cable / sat boxes and they don't have rent to own or there is a very limited amount of stuff you can buy your own but then they hit you with mirroring fees / outlet fees that are just about the same as the rent fee and with cable VOD will not work as well as some SDV stuff may or may work and you may need to rent stuff from the cable co to make it work as well as the cable card.

Heh reminds me of my wife. She had bad credit after her divorce, so she had to get a car through JD Byrider. She got a used Neon with 100k for like 6k. That wasn't the worst part though...the loan was 25% interest, and it wasn't a simple interest loan. So as soon as she purchased it, she was responsible for $12,000 (as they apply the interest up-front). Right now the car's blue book was around 1k, just 2 years later.

@balthisar: A few years ago, I bought the cheapest VCR available while on a long term business trip as well. It cost me $50. Best purchase ever.

@razremytuxbuddy: Unfortunately I agree with masonreloaded. I grew up in a very poor town in rural Missouri and a lot of the families struggled to pay for everything. For every responsible family that spent their money wisely, there were two or three families that lived in horribly-maintained trailers and didn't have furniture, but had cable TV and a fancy new camero. My fiance's high school class spent a year raising money for an impoverished family, and when they gave them the money they had raised instead of buying clothes for their kids or food they instead bought a new big screen TV. I knew a family that used car seats as dinner chairs and their kids didn't have shoes, but they had a nice satellite dish hanging off their house.

I don't know what causes this mindset or what can be done to change it, but there seems to be a definite train-of-thought that a lot of poor people (not all, but definitely a lot) have adopted that makes them act this way. All it does is keep them poor.

@masonreloaded: When I was in college all our our couches came from goodwill and cost less than $40 each. They were the most comfortable couches we ever owned, even if they weren't the prettiest. Even my little sis from BB/BS loved our goodwill couches.

@pecan 3.14159265: I've noticed that I could be so focused on getting a new HD tv, or some other high end item I can't afford...researching online, making bad finaical decisions to get the item...then a short time later, I'm lusting after some other item.

I just like new toys. I think many of us are like this, and the problem is when you sacrafice for something you don't really need, then find you just want some other item around the corner.

@JulesNoctambule: I've never seen a couch for $75! That's amazing, congrats on your big find.

I'd like to blame two groups. The people who perpetrate the stereotypical "Bling" culture and those who fall for it.

Society is just a group.. it has no objectives or motives.

@henwy: You just helped explain part of why it -is- a terrible deal.

Go buy someone else's devalued TV on the cheap, and don't pay 100x (if you count depreciation) what it's worth to Rent to Own one.

There are limited situations where rent-to-own places are a good deal. One specific situation is renting a washer and dryer for a big family. The few times I've had to go to a laundromat for my family of 4 for a week's washing, it cost me $25 or so to wash and dry that amount of laundry (not including soap). The rent-to-own place near me advertises a washer/dryer pair for $17/week. So if you're doing that amount of washing and have W/D hookup and no way to pay cash for a washer/dryer pair immediately, that's actually more cost-effective than the alternative. In the general case, though? You don't need that big TV, trust me.