Believe it or not, the average cost of a refrigerator alone can range from $375 to $12,050 depending on the type of features you want. That high price tag carries over to almost every major home appliance in your house.
If you’re trying to furnish a house or even just upgrade your home’s older appliances, paying full price upfront for new models isn’t always an option. Rent to own appliances help you upgrade your house without forcing you to pay everything upfront.
While it’s convenient, renting appliances isn’t always the best choice for everyone. Read up on the pros and cons of appliance leasing so you can choose the best option for your budget.
The Benefits of Rent to Own Appliances
Renting appliances, whether you plan to buy them eventually or trade them in, is a great way to furnish your house. You’ll be able to choose from the same products you’d find in large box stores without having to pay the full retail price upfront.
Here are a few of the surprising benefits of using rent to own appliances instead of buying them outright immediately.
Renting Won’t Hurt Your Credit
When you buy large-ticket items like electronics and appliances at standard retail stores, you have two choices: you can pay upfront or you can finance the purchase. If you pay upfront, you’ll need to have the cash on-hand.
If you finance the purchase, you’re able to break it into monthly payments with a loan or by using your credit card. However, this can hurt your credit score. The more debt you carry, the lower your score will get.
When you rent appliances, you get to break the cost up into monthly payments without having to worry about taking out a loan or lowering your credit score. Remember, you’re signing a rental agreement, not borrowing money.
Helps You Get Higher-Quality Products
You often get what you pay for with appliances. This means higher quality products that will last longer almost always cost more.
Unless your budget is incredibly flexible or you have tons of money saved up, you’ll likely have to limit your options to the appliances that you can realistically afford. This means settling for a lower-quality product that you’ll end up needing to replace in a few years.
When you rent, you’re able to gain access to those high-quality products that you otherwise wouldn’t be able to pay for. That means you’ll be able to get more bang for your buck and can start building your dream home more easily.
Flexible Payment Options
Renting appliances gives you access to more flexible payment options and rental terms. You can break the payments down into smaller chunks by agreeing to a longer rental term or pay higher prices for a shorter period of time if you just want to ease into buying the appliance.
When you finance the purchase with a loan, you’re locked into the payment agreements that the lender offers you. They’re rarely flexible and if you miss a payment, you’ll get slapped with late fees and high-cost charges that can derail your budget.
You’re Not Locked Into Buying
One of the biggest benefits of looking at appliances for leasing is having the option to buy the appliance outright at the end of your lease. Often, the payments you’ve made will help count toward the purchase price of the appliance.
However, you’re not required to buy the appliance once the rental agreement comes to an end. You’re able to renew the rental or sign a new lease for a newer model that better fits your needs.
The Downsides of Rent to Own Items
There are many benefits of working with rent to own shops, but there are also a few pitfalls you need to be aware of. While they may not be severe enough to keep you from signing a lease, make sure you’re familiar with them so you can make the best decision for your personal finances.
You’ll End Up Paying More Than Retail
Ultimately, you’ll end up paying more for the appliance by signing a lease than you would by buying the appliance in a store. While it won’t hurt your credit score, it can end up taking a toll on your budget in the long-run.
If possible, try to save up to buy the appliances you want rather than renting them. You’ll end up paying less and will be able to avoid the frustration and stress of monthly financing payments.
Interest Rates Are High
Many rent to own shops charge you an interest rate for the product. This rate can vary from shop to shop, but it’s often far higher than the rates you’d get with a personal loan.
Some interest rates end up nearly doubling the price of the appliance over the life of your rental agreement.
If your end goal is to buy a specific appliance without having to pay the full price upfront, you may be better off taking out a personal loan. Though you’ll pay interest on the loan, it will likely be lower than the rates the rent to own company would charge you.
Some Stores Have Hidden Fees
The rental agreements you’ll sign will vary from company to company. Many appliance leasing stores add hidden fees in their agreements that you’ll only find if you read the agreement in detail.
You could end up having to pay a penalty if you miss a payment or even a cancellation fee if you need to terminate your lease for any reason.
Are Rent to Own Items Right for You?
Deciding to invest in rent to own appliances is largely a matter of personal preference. They can help you get higher quality products without forcing you to pay the full price upfront. However, the rental agreements can end up making the appliances far more expensive than they need to be.
Whenever possible, save your money and buy the appliances you need with cash rather than financing the purchase. However, if you need to break the cost up into monthly payments or don’t want to keep the appliance for more than a few months, renting is a great choice.
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