Rent-to-own, also called rental purchase, is a business model in which a customer leases an item such as furniture, an appliance, a vehicle or a home, making periodic weekly or monthly payments, with the option to buy the item outright at some point during the agreement. At each payment interval the customer can renew the lease, return the item to end the arrangement, or exercise the option to purchase it, which distinguishes the model from ordinary rental, which carries no purchase option, and from an installment plan, which commits the buyer to eventual ownership. The practice originated in the United Kingdom and Europe before becoming established in the United States during the 1950s and 1960s, and the industry today serves millions of customers through thousands of dedicated stores across North America.
Facts
Core MechanismIn a rent-to-own transaction the customer leases an item, such as furniture, electronics or a vehicle, for a weekly or monthly payment while holding an option to buy it at some point during the agreement. Unlike an ordinary lease the customer can exercise that purchase option at any time, and unlike a hire-purchase or installment plan the customer can instead end the agreement simply by returning the property. 1 Cross-Tradition Connections
Associated With
Rent-to-own, letting customers acquire goods through periodic payments with an eventual ownership option, is an established retail industry format for furniture, appliances and electronics.
Sources
1. Wikipedia, Rent-to-Own
WikipediaWikipedia: Rent-to-own, lead paragraphQuote, Wikipedia: Rent-to-own, lead paragraph
Rent-to-own, also known as rental purchase or rent-to-buy, is a type of legally documented transaction under which tangible property, such as furniture, consumer electronics, motor vehicles, home appliances, engagement rings, and real property, is leased in exchange for a weekly or monthly payment, with the option to purchase at some point during the agreement.
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