If buying a flat screen television set or washing machine is too much for your budget, should you consider renting home appliances?
The short answer is “No – don’t rent” because you will end up paying much more in rental fees than buying the appliance outright, says consumer advocacy site, Choice and ASIC’s MoneySmart website.
A fridge at $40 a week may sound like a good deal compared to the thousand-dollar price tag in a retail store. But renting appliances can cost you a lot more than you think especially if you are renting the appliance over a 36 or 48-month period. This could work out to be five times more than the cash price of the appliance in a store, Choice says.
And don’t be fooled by the advertised slogans “rent to own” or rent to buy”. These are separate options from a consumer lease agreement. When you sign a consumer lease, you will have to return the appliance at the end of the lease. You can make an offer to buy it but this often involves an additional amount of money. By this time, you would have already paid more than three times the cash price of the appliance, says MoneySmart.
If you need a washing machine, dryer or fridge and don’t have the money to buy it right now, renting is not your only answer.
There are other ways of getting what you need, MoneySmart says.
*Save for it – set aside some money every week and save to buy it
*Put the item on lay-by. Some shops will let you buy the product on lay-by and pay it off over a period of time. The shop will keep the product until you have fully paid for it.
* If you are low-income earner, you can apply for a “no interest loan scheme (NILS) to buy what you want. This type of loan means you pay back exactly what the item costs.