by Colleen Tressler
Consumer Education Specialist, FTC

Need a sofa, washer/dryer, TV, or new tires? Don’t have the cash or credit to buy them outright? You may be considering rent-to-own: simply make weekly or monthly payments for a while and you own the goods.

Related: 5 Smart Ways to Protect Your Credit Score 

But before you sign on the dotted line, consider this: renting to own can cost two to three times what you would pay if you bought with cash, on layaway, or on an installment plan. And if you miss one or more payments, the goods could be repossessed. You might be able to get back your stuff — if you can catch up on the payments. But if you can’t, you risk losing everything you paid.

And did you know that some rent-to-own merchandise may be several years old? It might even have been rented by other people before you. Also, there may be fees: for everything from processing to delivery and pick-up, to set-up/installation and excessive damage, to late payments and reinstatement fees.

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When it comes to buying items for your home or car, you have other options. For example:

  • Find out whether you qualify for store financing. Many stores offer no payments for 90 days, or some other amount of time.
  • Consider layaway — putting money down and paying over time. You get the goods when you’ve paid in full.
  • Think about whether you have room on your credit card. Even a high credit card interest rate is probably cheaper than rent-to-own. Consider this: If you turn the monthly rental fees into an annual percentage rate (APR), they could range from about 100% to 350%. Credit cards typically don’t top 24%.

Want to learn more? Check out Rent-to-Own: Costly Convenience.