Aaron's Lease to Own - How to Buy a $1,300 Playstation

There is only one other nationwide player in the Rent-to-Own retail business, Aarons. God help you if you screw up your credit and are left to buy things here, because you'd get better prices in prison.

Introduction
Aaron's is a nationwide chain of retail stores. There are about 1,800 stores across the U.S. and Canada. Sacramento has three.

Aaron's is not rent-to-own, it is lease to own. Nearly everything they sell is leased with either 12, 18 or 24 monthly payments, and once the final payment is made, the item is owned by the leasee. This is a way for someone to buy furniture, electronics and appliances without having good credit. Aaron's doesn't even check your credit. Instead, they check with your job, your landlord and your friends to see if you are trustworthy enough to trust to actually make payments and not skip out of town.

To begin a lease, they will need phone numbers for your landlord, job and three (or four) personal references, who they will call.

This background-checking and risk taking is costly, so Aaron's charges a premium for their items. The products are marked up, they tack on a service charge and with the total lease cost, the eventual cost of ownership is jaw-dropping.

The Store
Aaron's is a small store, filled mostly with furniture. Appliances occupy one corner, electronics mostly fill another. There's a table for laptop computers, which may or may not actually have computers out. Detailed price cards stand on every item, including the artwork, lamps, vacuum cleaners and even clocks.

The Aaron's Price Tags
Leasing to own is a little more complicated than regular buying, and the price tags at Aaron's reflect that complexity. The ugly truth is all here, which is good for the careful consumer. As a general rule, the good news is shown in large numbers, the bad news is shown in small numbers.

This bed and frame is pretty cool, with a 32" television which rises up from the footboard. $224.99 is the monthly price, plus another 10% for "service". Aaron's knocked $6 off of the monthly price, because this bed is used. That's where the $131.99 in "savings" comes from at the bottom.

For $247/month I could lease a new Toyota Corolla. For $5,939 I could buy five beds and five 32" tvs.

ASP, the 10% Aaron's Service Charge
Just under the bold monthly price is the price including the ASP, Aaron's Service Plan. This 10% surcharge is added to every lease price. So, if the large, let's call it "Showcase Price" is $49.99, the real price is 49.99 plus another 4.99, for a total of $54.98 per month.
This charge is attributed to cover potential repairs, potential loaner equipment in the case of equipment failure, and delivery and relocation moves. In my opinion, it's bullshit.

ASP doesn't apply if you just buy an item outright for cash or with a credit card.

Price Comparisons
Aaron's prices are high if you pay cash, super high if you lease-to-own. The first crazy-high price I noticed was on a Playstation 3. Aaron's has them for $749! That's almost twice as much as a regular retailer, like Sears or Best Buy.

If you have a Best Buy credit card, even though that isn't the greatest credit card in the world with a 28% annual percentage rate (APR), you could pay off your $368 Playstation with nine $49.99 payments, as shown above. The cost of borrowing the money would be about $40.

If you lease-to-own a Playstation 3 from Aaron's, you'll pay $49.99 x 1.1 x 24 months, or $1,319.73!

In California you are going to have to pay $108 in sales tax on that price!

Playstation 3 Move Bundle

And check out this 15.6" Toshiba laptop in the Aaron's Holiday flier. Aaron's got it for $87.98/month for 12 months, or for $719.99 if you are paying cash or credit. These are both terrible prices.

Best Buy had the same laptop for $400. If you have a Best Buy credit card, paying it off would take about five $87.98 payments and end up costing about $440.

If you lease-to-own this Laptop from Aaron's, you'll make twelve $87.98 payments, or $1,055.76

Toshiba 15.6" Satellite Laptop

Here's a small television for lease-to-own at Aaron's. A 32" LCD flat panel television, for $449 or $29.99/month for 24 months.

Best Buy didn't have a JVC or Magnavox 32" tv, but they had this Dynex 32" for for just over half that much.

If you have a Best Buy credit card, paying it off would take eight $32.98 payments and end up costing about $262.

If you lease-to-own this Laptop from Aaron's, you'll need three times as many $32.98 payments, and pay $791.

32" LCD HDTV

Aaron's also lease-to-owns a 55" Samsung LED 1080p HD tv

For this item, Aaron's "Everyday Low Price" is $1649. That's $150 more than the same TV at Best Buy.

For leasing it to own, Aaron's charges $119 per month for two years, or $2,903 in payments ($109.99 x 1.1 x 24 = $2,903.73)

If you used the Best Buy Credit card, you'd pay it off in 17 payments of $109, $1,826. I should add, though, that Best Buy won't charge you that interest if you pay off big home theatre purchases like this in less than three years.

Refrigerator - 16 cu. ft.

Aaron's - $974.99 cash ($64.99 x 1.1 x 24 = $1,715 total payments)

Best Buy had a slighly larger 18 cu. ft. Fridgidaire fridge for $569.99. This is more than $400 less than the cash price at Aarons.

Dyson Animal Vacuum Cleaner

Aaron's - $809 cash ($89.99 x 1.1 x 12 = $1,187.86 in payments)
Best Buy - $599 cash

Kitchen Table Round with four chairs
I'm not sure why, but this little round kitchen table made me more upset than all the electronic stuff. I guess its because people with bad credit actually need tables and chairs. Aaron's had this set available for $543.88. A used table and four wooden chairs, $543?

The lease-to-own plan was for 12 months: Twelve $64.76 payments for a total of $777.
Aaron's - $543.88 (used) ($58.88 x 1.1 x 12 = $777.21 in payments)

For comparison, a regular furniture store, Beck's across the street, offered this table for $399. It was much nicer, with wrought iron, upholstered chairs and an inlaid veneer top. And it was new.

Ikea is my first option for furniture, just because I've spent so much time there. Ikea offers a nice BJURSTA table for $229 and INGOLF chairs for $59.99 each. $229 + (4 x $59.99) = $468.96. Again, that's for new furniture, although you do have to assemble it yourself.

Summary
Aaron's is pretty much the worst place to buy furniture, televisions, appliances or a Playstation. All their stuff is totally overpriced. They stay in business because people with bad credit have rotten options for large purchases.

If you are considering leasing something in a place like this, try buying used furniture on Craigslist, or using layaway services at Kmart.

Thank you for reading Cockeyed.com.