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Posted: 1/2/2007 6:31:47 PM EDT
I know someone somewhere makes a buck off of these deals but I have no clue how they work and what the scam is? Could someone please explain them to me.
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Posted: 1/2/2007 6:38:14 PM EDT
[#1]
They rent low(er) end furniture, TVs etc. You "rent" a $600 couch for three years paying about $35 per month (or so). You end up paying $1,260 over the life of the rental - they make a load of cash (plus they sit on your "deposit" for 3 years. Do the math - its always a bad deal.
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Posted: 1/2/2007 6:38:23 PM EDT
[#2]
A person cannot get regular financing. So they go the rent to own program. ie. a person gets a $400 tv that they pay $25 a week for three years then it's theirs. However if they miss a payment (I've dealt with this with car repo's) the repo man is out their the next week to pickup the item.
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Posted: 1/2/2007 6:43:46 PM EDT
[#3]
I see the houses that are "rent to own" all over this city. Must be a bitch to pay twice the value for a house.
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Posted: 1/2/2007 6:44:01 PM EDT
[#4]
If you notice, the payments are often listed as weekly. It's not dishonest as it's not hidden, but they hope you don't notice and compare it in your mind with other cash outlays that are monthly. This used to happen, but I'm not sure if it still does. The business is completely ligit, even though it has a rep for praying on the dumb. It's not the businesses fault that many people who don't make a lot of money will spend all that they have trying to appear more well off. Most of the time, these folks have credit bad enough that they couldn't get a credit card to buy these goods. Speaking of credit, once upon a time, credit was actually hard to come by, so establishing a good record was critical, and many WOULD NOT LEND to you without an extensive history. A 'rent to own' type of place could help you establish a record that could transfer to the banking sector. |
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Posted: 1/2/2007 6:47:17 PM EDT
[#5]
Check out a "Rent-To-Own" flyer next time it comes in the mail.
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Posted: 1/2/2007 6:47:43 PM EDT
[#6]
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Posted: 1/2/2007 7:07:32 PM EDT
[#7]
They charge 20-35% interest on the stuff you buy. Yes, somebody is most definitely making money off this stuff.
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Posted: 1/2/2007 7:12:35 PM EDT
[#8]
Why would they bother with the pittance you are talking about?? 800% over the life of the item was standard 15 yr ago. |
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Posted: 1/2/2007 7:14:03 PM EDT
[#9]
Rent to own for furniture & consumer goods is way different than rent to own for a house. For a house it's typically called a "lease option". In these situations you typically pay rent at market rate or perhaps just below and an additional payment is made to the owner and is placed in a trust or escrow account in hopes that you'll buy the home and use it towards your down payment.
These are typically rather loose contracts meaning you, the renter, can choose not to buy and get your money for the down payment back with little or no penalty. How and when you choose to set the purchase price for the home is totally up for discussion. So in an increasing market this can be a good deal if you can close on a home in Jan 2008 with a purchase price based upon Jan 2007 values, but if the market goes south you're basically screwed unless you can renegotiate. Typically these fail to close so if you find a seller who is offering this type deal it means they're likely desperate and will negotiate. |
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Posted: 1/2/2007 7:28:46 PM EDT
[#10]
My favorite:
 
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Posted: 1/2/2007 7:41:55 PM EDT
[#11]
LOL, those are a bit different, and there a million different ways a lease-option can be set up. |
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Posted: 1/2/2007 7:44:52 PM EDT
[#12]
damn, what a great moneymaker!! but the clientele are probably scum 
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Posted: 1/2/2007 7:45:36 PM EDT
[#13]
It means you end up paying double or triple the retail value of the item
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Posted: 1/2/2007 7:46:33 PM EDT
[#14]
I'd bet you'd be repo-ing a set of 20s daily. 
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Posted: 1/2/2007 7:51:05 PM EDT
[#15]
Instant Gradification, no one wants to wait anymore for anything. They want it all right now, some are too stupid to realize they are getting used and ripped off in the process.
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Posted: 1/2/2007 8:07:05 PM EDT
[#16]
I stopped in a rent-a-center shortly after I moved to a small military town, where the options for appliances were RAC or the local mom'n'pop whose market is screwing the military folks.
 I opted for uhaul and a sears 2 hours away. Sears price + uhaul + mileage + gas + time + dinner & beers for 3 friends was STILL only about 1/3 what the RAC price would have been. |
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Posted: 1/2/2007 8:13:00 PM EDT
[#17]
The feds have been trying to prove for years that the big rent to own chain that started in my area was a mob money laundering front.
Anyway you rent crappy junk furniture to stupid people and charge usurious interest rates, when they don't pay you threaten to repo their crappy particle board junk. There are some pretty specific laws in NY you have to be aware of, not something to get into without talking to a lawyer. Not much above become a foster parent so you can start a sweatshop on the morality scale. |
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Posted: 1/2/2007 8:48:47 PM EDT
[#18]
As I stated in another thread, I bought a mobile home and lot on a rent-to-own deal. I was already renting the place, there was no down payment and my monthly amount paid was the same amount as the rent was. I paid $5K for the land and mobile. It was paid in about five years. I sold the old mobile and used the money as a down payment on a new mobile ($35K). Four years later I sold the whole thing for $60K. This may not be typical, as the commercials often state.  As far as the rent-to-own furniture and appliance places go they are there for people without good credit and they charge very high interest to cover losses. |
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Posted: 1/3/2007 3:25:43 AM EDT
[#19]
+1 Alternatively, some Lease option deals include a set purchase price after a period of time, such as 2 or 3 years. This typically works better in an appreciating market, and allows the optionee to tap into some of the growth in the value of the home to qualify for financing. |
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Posted: 1/3/2007 3:31:06 AM EDT
[#20]
Good Lord... Go to Good Will and a get a couch...or look in the local Thrifty Nickle or other add paper..What a waste  Thier are always deals on used furniture around a military base...people have to get rid of shit to move..FAST... |
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Posted: 1/3/2007 3:36:05 AM EDT
[#21]
Oh no, Heaven forbid they buy USED furniture. It has to be new, even if it costs them $2.000 for a $400.00 couch. If I didn't think I would be eaten up with guilt, I would open one of these places. 
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Posted: 1/3/2007 3:42:33 AM EDT
[#22]
I interviewed for a job once..with the "Associates".... I didn't exactly know what the company was about... Well I found out: It was a finance outfit that specialized in small loans... Let say Jose comes in needing $200 fast... You take the title for his car as collateral and charge him an outrageous interest rate...like 80%... Durring the interview I could not help myself from looking at the lady behind the desk like some kind of a criminal...she caught onto this and told me " It may seem outrageous, but you learn to live with it".. I didn't want the job...no way in hell I would have wanted something like that on my resume. |
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