Renting to Own.

  If you watch television or read the newspaper, you'll see ads hawking the opportunity to rent furniture or appliances for a minimum weekly rental price.  If you rent the item long enough, the company states you now own it. 

It sounds like a great deal.  For a minimal cost you can get that refrigerator or television you want but can't afford to buy. Unfortunately, these places do not tell you how much the total cost will be so you cannot do a full comparison.

This video is a great way to introduce the topic.  It shows a man who steps into a rent to own store and checks out the cost.  It was fun watching the guy figure out the cost of buying vs renting.  He calculated it was going to cost three times more to rent than buy.

To give students a better idea of the interest rates charged for people to buy through leasing.  This site gives some excellent examples of prices if purchased at a store vs purchased through the rent to own companies.  It goes into detail and explains why these companies can charge exorbitant rates when leasing to people.

There are occasions when renting is a great option such as wanting to rent a large flat screen television for the super bowl game or needing tables for a wedding.  For short term rentals of a week or two, this is a valid option.  If you want to own something, this is not the way to go.

What makes it attractive to people is that most of these places do not require a credit check.  This means if someone has gone through bankruptcy or have lousy credit, they can rent items from these companies.  For people who do not have a lot of money available, renting to own is attractive because you know how much your weekly payment but too many do not stop to check out the final cost.

This brochure discusses rent to own covering things like the store owns the merchandise until you finish paying it off.  If you miss a payment, they can take it back and you lose all your money. It also gives a couple of examples showing the cost of an item if you buy it vs using rent to own to purchase it.  It is a well designed and easy to read.

This blog has a wonderful activity designed to have students calculate the amount of interest charged by rent to own companies.  In the first part author shows students how to calculate the interest.  The second part has students select three items and calculate the interest themselves.  If you follow this with this activity.  The activity has walks students through an activity designed to lead student through figuring out the cost of rent to own.

I think this is an important topic to expose students to because many students in the lower socioeconomic level use rent to own all the time.  Let me know what you think!