ConsumerWatch 10: Cost of Rent to Own

Renting to own... In the wake of this money mess, it's becoming an increasingly popular option for those hoping to save some cash. While renting to own is a saving grace for Americans with bad credit or fixed incomes, you should look at the big picture before renting that big screen TV. Guillermo Herrera has a house full of rentals. "My entertainment center, my bedroom set, my television, my fridge, my stove." He's not alone. Aaron's Sales Manager Annette Hill says "they can't afford to buy straight out from the furniture store or they have bad credit to start."

For those in that situation, renting to own is a good way to afford the things they need, but if you can handle waiting a few extra months, you could save a whole lot of cash. We did the math... You can rent a 52-inch TV at $228 a month for twenty four months... A total of $5472. The retail price is $3000. Unless you just must have that TV now, you can save thousands by putting that $228 into a savings account instead and in one year, you'll have enough cash to buy it.

Same for a washer and dryer.... You'll spend about $600 more by renting now than if you waited to purchase it later. Herrera says these savings don't matter... Renting to own is the only way he can afford the things he wants. "I have other bills to and stuff."

Here are some questions you should think about before deciding if renting to own is the best option for you.

1. If you paid cash, how much would the item cost you?

2. How many rental payments will it take you to pay enough to own the item?

3. How much will each payment be?

4. How much of a difference is it between the total at the end of the rental payments and the total if you were to buy it outright or even on credit?

5. What condition will the item be in? New or used?

6. What is the store's policy on late payments?

7. If you cannot make the payments, what is the store's return policy?

8. Is there a way to pay the item off early to save monthly fees?