It's incredibly difficult to figure out how much it costs, because none of the rent-to-own websites will give you a price. Instead, it's all bespoke, so that they can rip you off for the largest possible amount.

Example: "Aaron’s shopping cart is a little different than other web sites. You will of course get a guaranteed low price on everything you choose, but you won’t see pricing or payment info here on Aarons.com. So, you will only begin the process of purchasing or starting a new lease with our shopping cart. If you take 5 minutes now with the easy, 4 step shopping cart process, your local Aaron’s store will contact you ASAP and provide you local pricing and availability and help you take delivery in as little as one day."

Based on the one advertised price I was easily able to find [1], they're charging about a 400% markup, over retail. This would be equivalent to a loan at about 157% APR.

[1]: http://www6.rentacenter.com/Rent-A-Center-Home.html - the $24.99 a week "RAC Pack" - for 126 weeks, total payments $3148.74 for a Samsung PN51E450 and a Samsung HW-E450, total retail price on amazon: $737.94 ($547.99 for TV + $189.95 for soundbar)

>It's incredibly difficult to figure out how much it costs, because none of the rent-to-own websites will give you a price.

Pricing is different per-location too.

Depending on what you're using these outfits for, it can work out (he that's well paid is will satisfied and all that..), but for the most part, you're paying a lot of extra money for the privilege of getting a pretty decent replacement plan (both Aarons and RAC to my knowledge will replace broken appliances/electronics/furniture while on lease) and spreading the total payments due across a large period.

Whether that's worth it or not to you will depend on the person, really. I'd hardly classify them as predatory, or skeevy, or even really a rip off, just very, very expensive.

Actually looking through the article, all of the companies involved in this clusterf*ck are companies I've never heard of. None of the big names, at least.

Very expensive and only purchased by people who cannot afford it == skeevy.

I wonder if they don't publish pricing to avoid scrutiny similar to cash advance or payday lending. Whole thing should be hammered by the FTC.

So i get spied on and get hit with a 157% APR. That's brutal.

So the same as paying back a $450 phone subsidy in 24 monthly payments of around $60.

Nope, because if you pay the $450 extra up front, you have the handset and no phone service. People underestimate the cost of providing good phone coverage - in the past year Vodafone (AU) spent $1 billion upgrading their network, which only really covers the 15 biggest cities in Australia, and their coverage and data speeds are still trash.

Well the US has 15 times as many people as AU for similar landmass, so I give AU a bit more of a free pass for high prices. US however is terribly uncompetitive with the rest of the world.

In the UK for instance I definitely save money by buying my own handset. I use mostly data on my phone and pay £10 ($16) / month for my service. Contrast with the US where I was forced to have an $80/package to get any combination of voice/texts/data for my unlocked phone.

Even if I was taking the subsidy like a good American I would still be getting shafted to the tune of $1000 over a 2-year contract.

In the UK it is pretty borderline if you need a couple of hundred minutes plus the data. You are probably looking at more like £16 per month.

On that basis the iPhone 5 comes out a little cheaper on contract with Three over 2 years (£37/month + £90 upfront for 32GB) plus the free interest on the best deals although you can pay a couple of hundred more over the time with other providers.

For the iPhone 5 the 2 year cost is about £1000 including service for a full offer but only a few limited SIM only deals are much cheaper. Your deal would still be £840 for data only and a 32GB phone even if the prices don't go up.

Several down-votes? Odd not seen problems before with people singing the praises of suppliers the like - I don't work for these guys, just think they have a pretty amazing good deal, and was following up to the numbers that had been given above... anyway -

In the UK you should check out http://giffgaff.com/ - £10 a month for unlimited internet, unlimited SMS and 250 minutes of calls (mobile or landland, and free to other GiffGaff numbers) - not a bad deal at all. Runs on the o2 network, so pretty reliable.

£120 for 2 years is an amazing deal, and if you can buy your iphone 5 (or other mobile) on an interest free credit card, then you can make a very nice saving - £649 for 2 years service and the 16g iphone 5 (£529 from Apple).

My girlfriend just did this, but is paying off the phone at £50 a month (on a 0% card) so will be clear in 10 months, with just £10 a month to pay.

Also, it's just a rolling 30 day notice period - no 2 year contract.

Giff Gaff prices are going up and they have had some pretty prolonged service outages but it probably is the cheapest option still.

http://community.giffgaff.com/t5/Contribute-Innovation-Promo...

Edit

By the way £10 per month for 2 years is £240

Outage information (in addition to the O2 problem): http://www.theregister.co.uk/2012/03/16/giffgaff_down_again/ http://www.theregister.co.uk/2012/01/19/giffgaff_outage/

Cheers, I hadn't noted that, the new deals look OK:

£10 goodybag (change) 250 UK Minutes Unlimited UK texts 1GB Mobile Internet (Tethering will be allowed)

or

£12 goodybag (new) 250 UK Minutes Unlimited UK texts Unlimited Mobile Internet (Tethering will not be allowed)

Not as brilliant as they were, but still not bad. The only outage I saw was the o2 outage - was there others?

EDIT: just spotted their earlier one caused by the burst water pipe. Interesting how they spin the outage, as 'too expensive to prevent': http://crave.cnet.co.uk/mobiles/giffgaff-outage-too-expensiv...

Yeah I don't need hundreds of minutes, I use maybe 50 mins a month on average, but I use data and texts every day. I also don't have an iPhone, I have a Galaxy Nexus for another chunk of savings.

Admittedly the deals aren't as bad in the states if you are maximizing your usage of the plan, but for my use case it's a total rip off, as are the UK contracts to a lesser extent (because of competition).

Use cases and phone deals vary and it is worth doing the calculations in a quick spreadsheet looking at expected cost over the contract period. It isn't always the case that upfront purchase is best although I always consider it.

If you do go for the contract don't forget to call the day after it expires and switch to SIM only level prices otherwise any savings will disappear the the next month or so.

My current iPhone 4S contract is only 12 months which was available only to existing customers and worked out substantially cheaper than other purchasing options comes with an insane number of minutes 900 per month but was actually cheaper over the period than the 200 minute ones which would have been plenty.

I always pay for my phone up front because the time I've spent dealing with trying to get my phone unlocked when I travel between US/UK/Europe/Brazil is worth far far more than any potential savings.

Normally a subsidized plan won't cost more than $10-$20 extra.

I'm guessing its much more than 400%. After all, the stores that don't post their prices online (most of them) are probably the more expensive ones

And likely does not have the resources to litigate nor the education profile to know their rights to recourse. Sadly there is a segment of society that preys on such people and even worse a segment that feels that they get what they deserve for "being ignorant".

I think the spying should definitely be illegal as it would be in Europe because of privacy concerns. The financing is a little more problematic because you could argue a lot of things should be illegal like Louis Vuitton handbags for example. Have you seen the prices? It is unreal you could get 5 bespoke handbags from a master leathercrafter made from virgin snake leather or something. People who want to pay 3000 USD for a laptop are probably gullible enough to pay lots of money for other overpriced things as well. A reasonable requirement would be to always have to post total amount owed though to help people unable to do math. If they still agree there is not really much you can do.

Sorry I was not as clear as I could have been, most of my post was specific to the spying, with some latter cometary on the mindset of people that would do such a thing to that group of people. I agree that price is subjective and in the end it is the purchases responsibility to judge fair value. So long as nothing has been misrepresented, I think a person should be allowed to charge $50,000 for a 2 dollar item if they can get it and their is no duress to the situation (e.g gouging for gas in a shortage). That being said, I would be in favor of a consumer law that required manufacturers to disclose their total cost to produce an item. This would still allow retailers to charge what they feel is fair, but level the playing field for the consumer to see how much they are paying over the cost of production.

Surprised no one has nailed you for the gas gouging example. During a shortage, raising prices gets the gas to where it is needed most. Raising gas during an emergency ("value prcing") when there is no shortage, is a different matter.

Sorry I was not clear, the shortage I was talking about was something like a hurricane. Where people are preying on the desperation of the situation. Sure we could allow an unbridled market in such situation, but I think most would agree that gouging in an emergency goes beyond even the rent seeking of the rent to own establishments.