Just when I thought I had heard it all, I found out I haven’t. The other day I heard a radio commercial for a local business that allows you rent custom rims for cars. Rent rims for cars? Why in the world would anyone want to rent rims for a car? Bad enough many of these spinning tire toys cost up to $2,000, but now people are renting them? Yep, I guess I’ve heard it all.
Photo courtesy of South Beach Cars
Rent To Own
I have never particularly liked the rent-to-own business model, because to me it is like financing a purchase over twelve months and paying significantly more than the item is worth. Why not just save up the cash for twelve months and buy the thing outright? Because people suffer from instant gratification disease. The disease afflicts millions of us and is largely responsible for this economic meltdown.
Nobody wants to build wealth the old-fashion way, they want a get-rich-quick scheme. Nobody wants to wait to move into that dream house two or three house purchases a way, they want their starter home to have five bedrooms, a pool and a three car garage with a huge wired shop out back. Nobody wants to wait until they are making $150,000 a year to buy that brand new BMW, so they finance more than they earn in a year in an attempt to show everyone on the road that they are better off than they really are.
Now car enthusiasts can take the same approach by renting financing custom rims and tires, GPS devices and CD players. What’s next, renting televisions? Oh, that’s right, you can do that, too. But when you do agree to one of these rental agreements, no one tells you that in the end you pay much more for the item than straight retail.
For instance, during Super Bowl Sunday madness a local rent-to-own store was offering one of those big, widescreen televisions for only $99 a month (for twelve months). Problem was, it was an $800 television. I wasn’t the top math student in school, but to me that sounds like an overpriced deal by about $400. Still, I wonder how many people stopped to make the annual cost conversion.
The bottom line is this; as a collective consumer society we are going to have to break away from the monthly payment mentality that has had a grip on us since the invention of credit cards and car deals. It is no longer sufficient to say, “I can afford the payment.” No, the larger question is, can you afford the car? And if they answer is no, then you need to keep saving or look for something cheaper. The same goes for rims, televisions, computers, and anything else than can be financed. Which in today’s world, includes just about everything.