Is it ever a good idea to rent-to-own?

Rent-to-own agreements allow you to pay instalments towards the cost of an item weekly or monthly, but use it straight away. It can seem like a useful idea if you need a new washing machine, cooker or fridge urgently, but you don’t have the money to buy it straight away. But is it really a good idea to buy in this way and will you lose out financially? Here’s what you need to know about the rent-to-own market.

home appliances

How does it work?

In order to rent-to-own you need to be approved for the finance first, which can either be done through the retailer’s website or in store. You may also be able to choose how long you want your repayment term to last and whether you want to pay it back weekly or monthly.

As long as you’re approved for the finance, you’re able to use the item straight away while you pay for it in instalments.

Remember, buying something via rent to own is still borrowing, so it isn’t something that you should do when you are on a Debt Management Plan.

Why the worry?

A number of people have suggested that the rent to own market doesn’t always work well for customers. For example, Citizens Advice published research on the sector last year. It identified four main concerns:

Rent to own shops are expensive. Not only is the initial purchase price of the item often higher than you can find elsewhere, but the interest rates they charge can also be high. Typical APRs can be around 100%.

The CAB suggested that not all rent to home firms do proper checks to ensure that customers can afford the repayments.

If you get behind with your repayments the firm may repossess the item, even if you’ve already paid most of the cost.

They often charge add-ons – for example, most rent to own companies insist that you have the product covered by insurance, so if you don’t have contents insurance yourself, you could end up paying more for the insurance provided by the retailer which might be more expensive than other options.

Save if you can

While there may be some instances where you can’t help but use a rent-to-buy retailer, in general it will be better for you financially to wait and save up for the item if possible.

When you’re on a DMP your budget is worked out so that you can put the most money towards your debts as possible but part of your income is also put aside for sundries and emergencies. So if you have enough put aside to buy the item you want outright, this is a better option than rent-to-own.

Give us a call if you’re worried

If you have an urgent need – and you are tempted to use a rent to own company (or any other form of borrowing) - then give us a call, and we will do what we can to support you.

Need expert help with your debts? Complete our form to request a callbackRequest a callback
  • 0161 669 8925
  • 0161 669 8925

Articles home

Top of page

What solutions are available?
Complete the form and our friendly advisor will call you back to discuss the best way forward.

Your total debt?


Just a few more details before we calculate your results

Go to final step
Go to final step

We just need a few more details

Please remember, the form above is just an information tool. One of our advisors will be in touch to answer any questions you may have and offer you more personalised advice on how to resolve your debt problems.
About us

We've been helping people get out of debt for almost 20 years. Read more about what we do and the charities we support.

Read more
Fees & key info

Read more about the fees involved with each of the solutions we provide.

Download the Insolvency Service guide to dealing with creditors.

Read here for information about our Complaints Procedure and referring a complaint to the Financial Ombudsman Service.

Conditions Apply. Repaying your debt over a longer period of time can increase the total amount to be repaid. Your ability to obtain credit will be affected. Fees are payable when continuing service is provided.
Top 5 tips for
beating debt

Read our top 5 expert tips on how to beat debt and deal with your lenders.

Read more