The rent to own transaction has more to it than meets the eye. The most appealing and unknown are the payment reinstatement option and the early purchase option.
The two most misunderstood aspects to the rent to own transaction is you’re obligated to the same payments. And, if you have to return the product, you lose all payment history. Not true. At any time, you can pay off the remaining payments in one swoop at 50%. And, if you cannot make payments on that HD TV or couch and needs to be picked up, the store will keep it for you just in case you want to resume payments.
The 50% off early purchase option is an important factor when budgeting with rent to own. Try saving up a little each week while making those rent to own payments until you can pay off the rest and save a bundle. Using the early purchase option makes renting to own refrigerators, tablets, beds and whatever else for the home more affordable. And much more affordable than minimal payments with a credit card. And, debt nor credit is extended with rent to own.
With payment reinstatement rights, stores will keep the product for a certain amount of time to see if you want to come back and resume payments at the point where you left off. This way, you don’t lose any of your payment history. In many cases, payment reinstatement rights can last a long time even for your lifetime for many companies. Obviously, it won’t be the exact same product but they will make sure it will be similar or better. And since your credit is not effected with rent to own then any payment history being disrupted won’t hurt your credit.
Rent to own home furniture, washer/dryer combos and refrigerators have come a long way. Consumers need to know all the aspects rent to own offers to make the best decision when acquiring home furnishings. It all depends on your financial circumstances and needs at the time.
Payment reinstatement rights and early purchase options are wedging rent to own’s presence in all market areas and with more mainstream companies. And, moreover, rent to own is becoming the fourth transaction option, up there with cash, credit and used.
Be sure to shop your local rent to own stores in your neighborhood. Each RTO company will have different policies regarding payment reinstatement and early purchase options. And play off rent to own competitors against each other to get the best deal for you.