Insider's Guide to Furniture & the Home Furnishings Industry

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Is Rent to Own Furniture Sturdier than Normal furniture?

Friday, November 16, 2018

Tags: furniture rental rental furniture

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Is Rent to Own Furniture Sturdier than Normal furniture?

A reader has suggested that Rent-to-Own furniture should be the best place to buy furniture to hold up forever. His theory is that it must be sturdy since it has to survive people who can just trade it in if it breaks.

The logical reasoning behind that statement is completely wrong for Rent-to-Own furniture.


Rent to Own (RTO) companies generally buy inexpensive low quality furniture. It is then marked up to an extremely high retail price and leased for "low" monthly payments.

The “rental” term typically lasts 12 - 24 months. The actual cost of the furniture will be recovered within just a few months.

The terminology “rental” is in quotes because these payments are not really rent. Although legal terminology can be complicated, the payments are more similar to leasing than renting.

The bulk of the "lease" payments are finance charges. The interest rates are extremely high, far above those charged by credit cards.

Here is an example taken from another article. It shows comparable pricing on a 40" LCD TV in a Rent-to-Own store.

Buy it Now Price: $1,199.99
Rent-to-Own Price: $1,919.76 (monthly payments)
Interest Rate: 60%
Lowest Price Found for Same Product (new): $499.00

If the numbers shown above were for furniture, the total cost (from the manufacturer) would probably be $250 - $300. That cost would be recovered after only a very few payments.

Most furniture returns in RTO are due to unpaid monthly charges rather than damage. Returned furniture has very little resale value.

In many states, RTO stores cannot rent out returned furniture.

In many cases, Liquidation firms purchase returned rental furniture. They pay a fraction of the original cost.

Rent to Own furniture stores should be avoided by most consumers. But it may be one of the only options available for people who do not have cash on hand and do not have access to credit.

Since no background check or credit report is required, a large percentage of Rent-to-Own customers are high credit risks.

This makes the Rent-to-Own companies particularly vulnerable to the condition of the economy.

Economic downturns can severely impact the profitability of Rent to Own companies. High unemployment, recessions, inflation and high interest rates negatively affect RTO companies.

For additional information on this topic check out Can You Actually Rent Furniture at Rent-a-Center Stores?

This article can be found on the Simplicity Sofas blog The Insider’s Guide to Furniture and the Home Furnishings Industry.

Rent to Rent furniture is significantly more durable than Rent to Own. This furniture may need to hold up for use over several years by many different customers. These customers can return (or exchange) damaged furniture upon demand.

Cort and Brooks are two major Rent to Rent furniture companies. Their customers are primarily business people who have temporarily relocated.

Rent to Rent furniture companies operate clearance centers. These clearance centers sell off used furniture that is no longer in condition to be rented, but is still usable. A substantial percentage of the furniture's cost may be recovered.

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