When you're itching for a new TV, or desperately in need of a new computer, it can be tempting to go after those rent-to-own deals. They offer you electronics in exchange for small monthly payments—small, that is, compared to the for-sale price of an item—and at the end of the lease period, that gear is yours to keep. But the old adage sticks: If it's too good to be true, it probably is.
Although it's a fun splurge to rent electronics for a special occasion—like a big TV for the super bowl or a window A/C unit for those few unbearably hot weeks in July—rent-to-own "deals" are definitely not a bargain.
According to research by Consumer Reports, at the end of the (extended) lease periods offered by many rent-to-own centers, you'll end up paying up to three times the retail value of your gear.
"Consider the deal for a $612 Toshiba laptop computer we found at one rent-to-own store. It was being offered at $38.99 a week for 48 weeks, for a total of $1,872, excluding sales tax and other charges. That's the same as buying the laptop at the manufacturer's suggested retail price and financing it at an interest rate of 311 percent. You could buy three of the laptops outright for that $1,872."
If you absolutely need to finance your gear, you'll get a way better rate putting it on a credit card. Even store cards, with rates as high as 30%, will save you serious cash in the long run over rent-to-own arrangements.
Of course, the best way to buy new tech is to make sure you (a) need it, (b) can afford it and (c) pay for it in cash.