How Does Rent to Own Work for Products?

What if I told you you could access the big-ticket products you’re looking for without paying the total price upfront? In this article, we will discuss the concept of rent-to-own (RTO) for products by breaking down:

  • What a rent-to-own agreement is
  • Products available and not available under rent-to-own
  • Where to find rent-to-own stores
  • Pros and cons of rent-to-own

A Quick Intro to Rent-To-Own

A rent-to-own agreement (RTO for short), as typically advertised, is where a consumer (lessee) agrees to make rental payments to a business (lessor) for a product within an agreed-upon lease period.

An RTO agreement for products could be an option to acquire electronics, furniture, and appliances by paying for them over time instead of all upfront. You can get that blender, new couch, or laptop by making regular rental payments instead of running up a large total on your credit card.

What Kind of Products Are Available Under RTO?

The products you can access under an RTO agreement may depend on where you shop and what you want to buy. If approved for a rent-to-own product, you may be able to access furniture, decor, or a TV by signing an agreement and making monthly rental payments. The variety of items you can access, if approved, reflects the array of RTO agreements you can enter into as a renter. These agreements vary based on the lessor you sign an agreement with. The lease period, fees, and sale price are some components that make up a rent-to-own agreement.

What Kind of Products Are Not Available Under RTO?

Some products don’t apply in rent-to-own arrangements because including them in a rental agreement wouldn’t make sense. Some products that don’t work with RTOs are intangibles, pets, perishable products, and services.

RTOs typically work with tangible and durable products where rental agreements make sense. Statistics from a recent PYMNTS survey state that 75% of US adult consumers say RTOs are the only way to get durable products on a monthly rent payment basis.

Here are some products that are available on a rental-purchase agreement basis:

Furniture

If your space is overdue for an upgrade or you need some furniture after a home or apartment lease, you don’t need to dent your budget further to make it work. An RTO agreement may be an option to help give your space a new look and feel while giving your budget a little space.

 

Home Appliances

You can get small appliances like a blender and larger items like a refrigerator on lease payment terms, if approved, with an RTO agreement. Items like a new oven or stovetop during the rental period can have you looking forward to preparing meals again.

 

Tires & Wheels

Getting some new wheels for your ride may not be as common as with other consumer goods, but it is possible with an RTO agreement. Consumers can contact providers like auto repair shops to see what alternative payment solutions* may be available for getting new vehicle tires or wheels.

 

Bedroom Furniture

Quality sleep is advertised as the ultimate productivity hack, so quality bedroom furniture or a new mattress may be a priority for some. Thanks to an RTO agreement, if approved, applicants can get bedroom furniture without taking on the total cost all at once. A new bedroom set may help with quality sleep, while a flexible rental payment structure may also help ease minds utilizing a pay-over-time, not all-at-once payment option.

Where Can I Find Stores Offering RTO?

After the assessment of products consumers can get on rent-to-own terms, the next step is figuring out where to find these products. Consumers may start by checking online or asking about in-store payment options. With American First Finance, you can begin the process by finding a store near you.*

What Are the Pros & Cons of RTO?

RTO lease contracts offer convenience and, for some, a “shortcut” to get what you need without paying for it all upfront. Rent-to-own agreements have cons, just like anything else, so here are the pros and cons of rent-to-own agreements:

Pros

  • Flexible rental payments compared to traditional purchasing; traditional purchasing typically requires you to pay all at once, upfront.
  • Customers can have immediate access to the product, where applicable.
  • Completing the lease term allows you to own the product.

 

Cons

  • Rent to own usually doesn’t allow for ownership until the final payment, but lessors may offer early ownership options.
  • RTO agreements are limited to tangible and durable products.
  • Consumers will pay more than the market value or market rate.

Summarizing Rent-to-Own for Products & Goods

Rent-to-own agreements can offer convenience and immediacy for some consumers. However, consumers should consider terms like price before signing up.

Consumers should also do their budget homework to ensure they can manage the rental payments and costs. RTOs come with an ownership option, which may benefit consumers looking to own their item or product. For some, a consumer product ownership option may be a good idea, like how one considers home ownership a path to owning a home. Check quality and consult the lessor or retailer the same way you might with a real estate agent.

RTOs offer a pathway for consumers with little to no credit to get big-ticket items without needing to build equity. These agreements are only available to tangible and durable products, though. Stores offering RTO products or rent-to-own terms can be found online or in business listings.

Credible lessors or retailers offering alternative payment solutions can also help offer solutions and provide access if approved. Each retailer’s agreement terms and conditions may vary, so carefully review and consider. Also, in some states, state laws govern and may affect your ability to get an RTO agreement, depending on where you reside.

*NOTE: Payment solutions vary based on the merchant and will be indicated at the beginning of the application process. Be sure to confirm that the merchant you select offers the lease, loan, or alternative payment solution you intend to apply for.