Rent-to-own customers sometimes pay double the retail amount — or more — for anything they purchase.
So, why do so many individuals choose to rent-to-own?
Rent-to-own is referred to as a “costly method to purchase.”
People who shop at rent-to-own stores, according to researchers, aren’t always dumb. Instead, they’re succumbing to the types of illogical thinking that plague the majority of people, as well as the restricted alternatives available to low-income individuals with lousy, nonexistent, or maxed-out credit.
“If you talk to rent-to-own consumers, you’ll find out that nobody believes this is cheap,” says Jim Hawkins, a University of Houston Law Center professor who has studied the sector. “Everyone is aware of this.”
Then, why is rent to own appealing?
The main benefit of rent-to-own is that it allows you to get your hands on Television right away without having to save or commit to a long-term commitment, which is especially challenging for low-income families who are less likely to have stable earnings than wealthy ones.
For example if you want to buy a rent to own tv of the Samsung – 55″ Class – LED – NU8000 Series.
Rent to own is convient because it offers the same features as well as sizes such as samsung – 75″ class – led – nu8000 series – 2160p – smart – 4k uhd tv with hdr or Samsung – 75″ Class – LED – NU8000 Series – 2160p – Smart – 4K UHD TV with HDR without having to pay it all it once as that can prove to be expensive.
Customers may acquire brand-name TV appliances, and gadgets with no credit checks or down payments and cheap monthly or weekly payments.
Rent-to-own firms generally provide free delivery, setup, and servicing if things require repairs, which is a significant benefit for many families that lack the financial resources to cover unforeseen expenditures. (According to the Federal Reserve, 44 percent of people in the United States would be unable to come up with $400 in an emergency.)
If clients are unable to make payments, the products can be returned without resulting in collections or harm to credit records. Because low-income households typically don’t have enough reserves to deal with unexpected expenses, Carnegie Mellon University researchers discovered this.
According to researcher Brian Zikmund-Fisher, who is now a professor at the University of Michigan, “an external observer may notice that they are paying a large price for those traits, and they are.” “However, it’s impossible for someone seeing these contracts from a position of financial security and luxury to fully comprehend the financial insecurity that many individuals face.”
Many clients who struggled to save money instead used rent-to-own contracts as a financial management tool, according to Zikmund-Fisher and his colleague Andrew Parker. Low-income people often worry that any money they save will disappear into other spending when their incomes fall, or that it will be eaten up by bank fees, or that it will disqualify them from certain government benefits, whereas payments required by a rent-to-own contract allow them to buy goods they couldn’t otherwise afford.
“They utilised [rent-to-own contracts] as a self-control mechanism since it required them to put money toward durable items on a weekly basis,” Zikmund-Fisher explains. Therefore, it is a convenient and a hassle free option.