The economy is bouncing back. That’s the word from the indices. But that’s a hard sale to make to a lot of people in Arkansas and the rest of the country who still find themselves living check to check.
For many in that boat, the reality is that they may lack any level of decent credit. They don’t even need to be in the situation where creditors are making harassing calls to collect on debt. Faced with a significant need that must be filled now, and lacking any other apparent solutions, they may opt for the rent-to-own route.
Such operators came into being in a big way back about 20 or 30 years ago. At that time, credit was widely available for most people. Those deemed high risk consumers, though, often found themselves on the outside looking in. What the Jones’s had looked good and by renting to own, those in the high risk niche could get their desires met.
In the current post-crash era, some of the rent-to-own purveyors have come to realize that there is a broad segment of the population for whom just getting basic needs met has become a challenge. For example, there’s been a boom in rental tire outlets.
The appeal is easy to grasp. The working poor need to be able to get around. If the tires on their vehicles are so bald that the steel belts are starting to show, the tires have got to be replaced for safety’s sake. If they lack the cash or credit, there’s rent-to-own.
Of course, the problem with the scenario is that the price these consumers wind up paying is exorbitant. They may be able to meet the immediate cost demand, but over the life of the possible contract, they could be spending more than double what they might have.
One of the major benefits of pursuing debt relief through bankruptcy is that certain unsecured debt can be discharged as part of the process. Tires bought with a credit card might qualify. But tires rented likely won’t be, as some bankruptcy courts have already ruled.
There are times when debt management becomes a priority. To be sure you’re fully aware of all the options, consider consulting an attorney to determine the best alternative for your situation.
Source: TheDay.com, “Economy-minded drivers turn to tire rentals,” Ken Bensinger, Los Angeles Times, June 30, 2013