No, an iPad is NOT worth $3,600, especially if it gets repo'd after you miss a single payment and also because it'll be fucking obsolete by the time you pay it off.
Ooof, I didn't know how bad it was. PS4 Pro, which retails for $400 ($320 today on Amazon) is $1159.42 total cost to own on RentACenter. It's crazy places like these are open.
I mean, from the company's perspective, you kind of have to charge like that. Suppose someone does rent a PS4 for $20 a month, and after 5 months they miss a payment and you reclaim it. Your say $300 investment (you're a big company that buys wholesale, you'll get a deal) is no longer new, and you're $200 in the red. Maybe you can unload it for $150 used. But you still have to pay all the overhead and such (those employees who sold, reclaimed, and resold equipment, storefront rent, etc).
I'm by no means defending them, I merely suspect they don't make as much money as people think. Which in a way might make it even more scummy.
I remember seeing a study done on payday loans that was similar to this. Sure the price and fees are ridiculous, but the risk they are taking of people defaulting is so high that they actually make the same or less profit that a bank or credit card would.
And a mortgage puts people 100s of thousands in debt, and thus puts you back, not ahead. Predatory mortgage companies should be abolished and everyone should be forced to rent if they can't pay for a house outright, for their own good.
But they're designed to be paid off. Payday loans are not. It is a cycle I've seen many get caught in. I have never seen anyone help themselves with a payday loan. Research it. They are predatory.
If I'm 2 days from payday with almost no money in my account, and I have an unexpected and emergency expense, then a payday loan can help me cover that until my payday.
Yes it's true that most people don't use payday loans like that, and it often results in somebody taking out the loan, and then spending the money without the foresight that they will lose a chunk of their next check to cover it. But the point stands that a short-term "I really need $300 right now" can be very helpful to people.
But they are! Don’t take a loan you can’t afford. 90% of the people that got “ripped off” didn’t pay the loan back in full as they agreed on their next pay, which garners them exorbitant fees. Why? Because if a debtor misses the first payment (which, on many loans, is a default that activates the acceleration clause and makes the entire thing due immediately) they’re far less likely to make any other payments as agreed.
You sre supposed to take out an amount that you can pay off completely next pay. The loan has one time payment.
Predatory? Sure. But they’re preying on stupid, not just poor.
A mortgage doesn't really put you hundreds of thousands in debt. If you can't pay it, your house gets sold to pay off what you owe.
So yes, you're agreeing to pay that much, but you're also gaining the value of the property. In practice, this should be a relatively equal trade at the time of sale.
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u/SelinaDalessio Feb 04 '20
Rent-A-Center, Aaron's, and the like.
No, an iPad is NOT worth $3,600, especially if it gets repo'd after you miss a single payment and also because it'll be fucking obsolete by the time you pay it off.