Furniture Financing: Rent-to-Own

Many consumers do not have enough cash to buy furniture, appliances, or electronics. They finance these items through a rent-to-own transaction. You may be able to immediately use the item without a down payment or credit check. You then make the monthly payments to use the item. You do not have to keep the item unless you choose to after making all the payments.

You make rental payments on the item for a certain period of time until it is completely paid. The agreement is a “rental” agreement, even though it is much like a loan. If you total all the payments you will make during the life of the contract, it could far exceed the cost of the item. Also, there may be fees and finance charges that will further increase the cost of the item.

New York has passed some of the strongest laws in the country to protect consumers who rent-to-own. The rental contract must be in writing. The contract must include the name, address and phone number of the store. Also, it must state the length of the rental term, the amount of each payment, and the total number of payments. The length of the agreement cannot exceed four months. The total number of payments cannot exceed 2.25 times the cash price of the item. The contract must also disclose the total cost of the rental and all fees involved. It must include a statement of your rights and obligations under the contract.

Legal  Editors:  Mark  Grossman,  Esq.  and  Edward E. Klein,  Esq.,  May  2018