Rent To Own Appliances – What You Need To Know

Rent To Own Appliances

Here’s what you need to know if you are considering renting an appliance

Most of the rental appliances companies that offer rental contracts are done on consumer lease agreements.

A consumer lease agreement is where you make small payments every week or fortnight on a rented item until the agreement finishes. Depending on the length of contract you choose these agreements could be anywhere from 6 months to 4 years.

Sometimes these agreements will be advertised as ‘Rent to Own’ or ‘Rent to Buy’ however most of the reputable companies have stopped advertising in this way because it is misleading.

You do not own the product at the end of a consumer lease agreement it is still owned by the company offering the consumer lease agreement.

A lot of customers have been caught out by this in the past with companies charging HUGE fees to purchase the product at the and of the agreement even though they have made repayments over and above the recommended retail price.

Typically on a consumer lease agreement you will end up paying 3 times the recommended retail price and this is why RentBot now exists. Even though with all rental companies you will be paying over the recommended retail price you can save yourself thousands of dollars on some products by going with shorter rental terms and finding the cheapest price on the product you want.

So if you don’t own the product at the end of agreement you might be wondering…

What happens at the end of my consumer lease rental contract?

Great Question!

With a consumer lease agreement your provider has to send you a notice at least 90 days before the end of your agreement outlining the following things

  • When your rental agreement is due to end
  • When, where and how to return your rental items
  • How much you will have to pay in fees or penalties if you do not return the item by the end of the agreement
  • If they are offering you a buy out figure for the product how much it will be, and who to contact if you wish to purchase the rental product

Now the last one is the most common scenario and it has bought rise to marketing campaigns of “Rent, Try $1” and “We Accept Offers As Low As $1 At The End Of The Contract”

You might be wondering why they require that $1 at the end of the contract, and now you know. Legally they have to provide you with a payout figure at the end of the contract so many companies let you pay the absolute minimum being $1.

But you still need to do your research because some companies it will be much more than $1 and other companies will keep taking payments from your account even after the rental agreement has finished. There has been some class actions recently taken again rental companies who did this and the industry has tightened up a lot these days with ASIC laying heavy fines on many of the rental companies.

Why do I have to nominate someone else to give my appliance to at the end of the contract?

Some of the rental companies are trying to get around the consumer lease by making you nominate someone you would like to ‘gift’ the appliance to at the end of your rental agreement. Again this is purely another method to easily navigate around the consumer lease contract as most people will nominate a family member so it is a simple way to rental companies to end the lease agreement and keep their customers happy.

Recently Rent4Keeps has added asterisks next to anything that mentions ‘Rent To Own’ and you’ll be surprised to read in their terms and conditions they state the following

“*References to ‘rent to own’ and or ‘rent to buy’ are explanatory only to ensure the consumer, customer, user or enquirer are clear that there is no further fees payable to rent4keeps after the term of the rental. The customer nominates the person to receive the gift at the end of the term and there are no further payments required at the end of the rental agreement.”

So the customers doesn’t actually own the product at the end of the rental agreement and they use the term to demonstrate that there are no further fees to pay after the rental term has finished but instead of owning you still have to gift the item to someone else, you can’t keep it.

This isn’t anything out of the norm, a lot of companies do it including Rent The Roo but most of the companies do not hide this away in their terms and conditions they are very open about it in their Frequently Asked Questions.

So what do you need to take away from this Rent To Own Appliances information?

  • You do NOT owner the product at the end of a Consumer Lease Agreement
  • Typically, you will have a very low payout figure to buy the product off the company you have the lease agreement
  • Or you will be asked to nominate someone they can ‘gift’ the item to at the end of the consumer lease contract.