Foreign Perspectives

Although normally quite low key, the rent to own industry is a very substantial business amounting to almost $7 billion.

What is it though? Essentially, it’s a means of purchasing a product (typically furniture) by effectively making rental payments but with an agreement with the store that you’ll own the product after a set number of payments have been made. Clearly there’s a credit aspect in this and therefore the overall cost of the product is higher than the ticket price in the store as with any credit purchase. However, because it is a rental contract it’s much easier to enter into the agreement if, for example, your credit record isn’t as good as it might be.

In that it’s in something of a grey area there are numerous rent to own state associations that keep an eye on the interests of the various organisations involved in the rent to own market. Since it’s relatively little appreciated, the majority of the bills going through the legislatures tend to take a negative stance they are an important cornerstone in persuading the legislators of the benefits that the market provides which are, of course, even more important than usual at the moment. With the difficulty that many people have in obtaining credit these days, it would be very unfortunate indeed to kill off the alternatives available for financing essential purchases.

As always these days, the Internet is an important conduit for rent to own news making it much more accessible in aggregate than it might be through traditional news sources.

The assumption that credit is essential is one that’s quite deeply ingrained in the psyche and the rent to own market is proof that it’s not essential and that you don’t need to get into a permanent rental cycle if you can’t get credit.

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