MOUNT VERNON — With a sagging economy and families’ budgets stretched to the limits, many consumers are turning to alternative methods of making purchases they need or want. One of those options is using the so-called rent to own stores.
There are two stores in the Knox County area that offer this kind of buying strategy: Aaron’s and Rent-A-Center. And, although the stores offer similar ways to buy, they have fundamentally different approaches.
Rent-a-Center is considered a short-term paradigm. That is, consumers have the option to rent to buy or just rent for a short period of time.
Aaron’s is both a retail store and it offers long-term leasing with an emphasis on buying. Both stores are doing well.
“Business is not down,” said Jeff Snow, assistant manager of the local Aaron’s. “In this economy, that’s pretty good.”
Snow said many customers, especially in the slow economy, find buying easier with the rent-to-own method rather than buying from a regular retail store.
“There’s no credit check,” he said. “And there’s no layaway. The customer can take their purchase home right away.”
Aaron’s has a slightly different approach to its business, having a long-term approach to its leasing plans.
“A short-term plan in a rent-to-own company might be someone who wants to rent a big screen TV for Super Bowl weekend,” Snow explained. “They have it for the weekend and return it on Monday.”
Snow said Aaron’s emphasis is for the customer to wind up owning the product through a lease plan.
“We do leasing, we do 90 days same as cash,” Snow explained. “We don’t really put the emphasis on rentals.”
“We are seeing some migration from consumers who might not have considered rent to own in the past,” said Xavier Dominicis, public affairs representative at Rent-a-Center corporate headquarters. “They are attracted to the flexibility of the rent-to-own contract. There’s no security deposit, no credit check, no long-term obligation. Everything’s included in one price; delivery, setup and service. They can pay weekly, bi-weekly or monthly; whatever they want. And they can return the merchandise anytime they want and discontinue the contract.”
Dominicis said the customer can also resume the contract at any time. He said this was a good option for someone finding themselves in a situation where they were unable to continue paying. It would allow them to renew the contract at such a time when they felt they could make the payments again.
“All of that flexibility is very attractive to consumers, so we are seeing an influx of consumers who may not have availed themselves to this rent-to-own proposition in the past,” he said. “However, if you look at our existing base, people that we’ve served over the years, there’s some fallout there, some drop-off. Because as some of those folks lose their jobs, what you find is that they return the merchandise, which is one of the benefits of rent to own.”
Neither Aaron’s nor Rent-a-Center said consumers are using these plans to buy Christmas gifts. Rather, these plans were suited to making major purchases for such items as furniture, beds or large kitchen appliances such as refrigerators or stoves.
Other popular merchandise, both agreed, were items such as large-screen TVs, small kitchen appliances and computers.
The rent-to-own paradigm was started in the 1960s as a way for people to acquire possessions without having established credit, according to Dominicis. It was also a way for young people to establish credit records. Dominicis said that in 2008 there were more than 8,500 rent-to-own type stores in the United States.
