It’s not a good sign for the prospects of the American working class when the president of a rapidly-expanding rent-to-own household goods company observes that items are coming back to his stores so quickly that it’s “like a Blockbuster.” Yes, it could be that a family just wanted to rent a big-screen TV for a special event, but items are more likely to come back because a customer couldn’t make their payments.

The Washington Post paid a visit to Buddy’s, a Florida-based rent-to-own chain that has been spreading throughout the South. The company’s leaders initially wanted to expand out of Florida to escape the aftereffects of the housing bubble. Recently, the Post followed a family as they fell behind in their payments and needed to decide whether to catch up or just let part of their living room go.

Rent-to-own is an old business model, but one that has grown significantly thanks to the recession. Normally, people with low cash flow and poor credit would have some high-interest borrowing options available to them, but the credit market is no longer interested in these customers. That leaves them in the rent-to-own market, where you can buy anything from an iPad to a living room set, only if you’re able to keep up with the payments and don’t mind paying $1,500 for a used iPad that’s a few generations old, or more than double the sticker price for a sofa that’s already been repossessed from a few other customers’ homes.

Rental America: Why the poor pay $4,150 for a $1,500 sofa [Washington Post]

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