The Way We Live Now: Rent-to-Own Tires

At first I thought this was a parody, but I should’ve known better. From the LATimes:

When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn’t afford to buy a new set.

So they decided to rent instead.

The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.

“I know you have to pay a lot more this way,” said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn’t using it to get to his job as a prison guard. “But we didn’t really have a choice.”…

Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation’s economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can’t get a loan anywhere else. But that access doesn’t come cheap.

Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can’t make them go away.

Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.

It’s also a booming business for specialized tire and wheel dealers that have become beneficiaries of a struggling U.S. economy. Fast-expanding chains with names like Rent-a-Wheel and EZ Rims 4 Rent that got their start selling high-end rims to car enthusiasts have discovered a lucrative market selling tires on time….

Since 2009, median household income has fallen more than 5%. And in the wake of the recession, the number of households in the country with credit histories too damaged to qualify for most credit cards has risen to 35% from 27% five years ago.

With more people shut out of traditional financing, the rent-to-own industry has flourished. Promising no credit checks, small down payments and the option to return merchandise at any time with no questions asked, chains such as Rent-a-Center are raking in huge profits from a customer base that’s swelled to 4.8 million people, up 67% since 2007, according to the Assn. of Progressive Rental Organizations…

Imagine the creativity wasted on such grim inventions. Being poor ain’t for sissies; it takes an enormous amount of effort just to stay at the bottom.

h/t commentor MattF

54 replies
  1. 1
    srv says:

    Emailed for franchising info.

  2. 2
    Narcissus says:

    This is the life the transnational corporate class want for all of us. They won’t be happy until they’re sucking every last cent of “wealth” out of human society.

  3. 3
    trollhattan says:

    shit, I saw that yesterday, reached for the calculator, and again wondered why we have usury laws on the books.

    Hey, I know, let’s slash food stamps in the Farm Bill.

  4. 4
    Higgs Boson's Mate says:

    Having killed the goose that laid the golden egg they’re now working to find uses for its beak, feet, and feathers.

  5. 5
    PeakVT says:

    Another aspect of the financialization of the economy.

  6. 6
    PurpleGirl says:

    @trollhattan: Some states don’t have usury laws. North Dakota doesn’t and that’s why Citibank moved certain units there a few decades ago — to take advantage of being able to charge high interest rates on their credit accounts.

  7. 7
    Another Halocene Human says:

    bankrupcy proof contract? doesn’t that f*ck other creditors?

  8. 8
    PurpleGirl says:

    @Another Halocene Human: It means profits for them. /scarcasm

  9. 9
    Suzanne says:

    Good. Lord.

    Once again, I am thrilled to be a Costco member. That’s the only place I buy tires.

  10. 10

    Check “cashing” stores, Payday loans, “Rent-to-Own” tires, what’s next?

  11. 11
    trollhattan says:

    @The prophet Nostradumbass:

    I’m thinking rental food. Kind of how the company store concept worked.

  12. 12
    LosGatosCA says:

    It’s very expensive to be the working poor. And there’s no respite – everything takes longer, costs more, generally lower quality, and no margin of error. And no vacations either.

    It’s not fun.

  13. 13
    Higgs Boson's Mate says:

    @The prophet Nostradumbass:

    Having your organs harvested to pay your debts?

  14. 14
    Narcissus says:

    @trollhattan: If you don’t maintain a minimum weekly grocery purchase they repossess your pantry.

  15. 15
    michelle says:

    The tire business is a scam. I got caught out in Clear Lake (a suburb of Houston) with a flat. I went to a retail place to get a patch, waited over an hour, only to be told my tire couldn’t be patched. I was running on the spare and just told them to put the tire back where it was. Of course they didn’t tie it down and I had to pull over and secure it.

    I made my way back to my downtown Houston hood and took the tire to Perez Tire. Got it patched for $5.00 and it has lasted for over a year.

    Hell, if I could, I would find these poor people another “Perez Tire” in their hood and pay for their tires.

  16. 16
    Susan K of the tech support says:

    I think that what’s needed, in this case, is to have a patent-infringement lawsuit brought against the rent-to-own tire company by some shell corporation that only exists to own the patent and to sue the hell out of Rent-n-roll and take them for egregious licensing fees.

  17. 17
    michelle says:

    @LosGatosCA: You reminded me of a case here in Houston. I’m not saying either were right, but:

    A grandmother left two kids in her car while shopping at Walmart. It was the winter and about 50 degrees F out. She got arrested and thrown in jail. She had to get an attorney.

    A father left his two infants in his car while shopping at a gun store. It was in late spring and the temps were about 80. People in the gun shop even announce on the P.A. asking about the infants in the car and the father did nothing — except keep shopping for guns. No arrests, no jail, no charges for him.

    You guess the difference.

  18. 18
    SatanicPanic says:

    @michelle: I had the same shit happen. Guy was like “sorry, it’ll be a hundred bucks for a new tire and we can get it this afternoon. I told him I had to go to work and I’d drive on the donut if I had to. Took it to Goodyear a few miles away, they did it for free. I always go there now. I swear, if you drive a crappy car these places will try to screw you every chance they get.

  19. 19
    michelle says:

    @SatanicPanic: I don’t even drive a crappy car. It’s just not a Bemmer or a Lexus.

    I think there is a thing about poor neighborhoods. Poor black hoods are subject to things that poor Latino hoods aren’t so much. At least that is my experience here in Houston. I think such things differ in a geographical way. I know here that poor black hoods just don’t have the same sources as Hispanic hoods do. And that point is exploited all the time.

  20. 20
    theturtlemoves says:

    @PurpleGirl: Wrong Dakota. It is South Dakota that has the ridiculous credit card laws and therefore the CitiBank incorporation. There’s also a pile of payday lenders that are incorporated there. The call centers for a lot of those credit card companies are pretty major employers for SoDak, in the eastern part of the state particularly. North Dakota, in contrast, actually still has a state-owned bank, as I recall. Never worked at those call centers myself, but knew a number of people who did, since they were just down the road from where I did work.

  21. 21
    Chickamin Slam says:

    Repossessed clothing companies … that’s the next big thing. Forget a payment for your Chuck Taylor’s and Bammo … yanked off you by some thug. Same thing with your jeans and t-shirt.

    You are now stripped of clothing? Luckily there is a cop nearby to whisk you away to a place where they all wear the same suit. Also you are now charged with a lewd act of having no clothes. Better hope you can afford a lawyer.

  22. 22
    PurpleGirl says:

    @theturtlemoves: Ah, thank you for the correction. I knew it was a Dakota that Citibank moved to.

    Luckily I’ve been able to avoid payday loans and the circular rut they put you in. I’ve avoided many of the financial traps out there — mostly luck.

  23. 23
    👽 Martin says:

    Never been illegal to fuck the poor. But ask the job creators for an extra nickel, and they’ll destroy the country just for entertaining the idea.

  24. 24
    Villago Delenda Est says:

    Oregon cracked down hard on the pay day loan parasites a few years back, drove them out of the state.

  25. 25
    SatanicPanic says:

    @michelle: My car was crappy. Still is, actually; I hate spending money on cars. I don’t know about Houston, but Latinos in CA have larger and more well-established communities and more political power, so I don’t think they have it as rough here either. We’re already at a point in CA where whites aren’t a majority, so things are changing very rapidly here.

  26. 26
    seaboogie says:

    This country is a horse’s ass. Money = virtue, and guns = power, and money + guns = God. And the poor are poor because it’s their own damn fault. Rent ’em some tires.

  27. 27
    Yatsuno says:

    @Villago Delenda Est: They still have them in WA, but they’re regulated to within an inch of their lives. They cannot collect any more than the initial loan amount plus the interest charges even if the lendee does not pay on time plus if the lendee gives word that they cannot pay off in full the lender must do a payment agreement with the lendee.

  28. 28
    Steve in Sacto says:

    To do full justice to this article and the times we live in you have to see the actual front page of the LA Times that features this article, with the Tiffany and Co. ad for its Gatsby Collection juxtaposed in the lower diagonal corner. Time capsule material for ‘decline and fall’ historians.

  29. 29
    PurpleGirl says:

    @Steve in Sacto: Thank you for that cite. It does sum up the times quite well.

  30. 30
    Keith says:

    Do you also have any stories about dead puppies and orphans?

  31. 31
    Ruckus says:

    @Keith:
    Can you rent those?

  32. 32
    Ruckus says:

    I was without work for over a year, and about a year ago I had less than $200 dollars to my name and no income on the horizon. Hope that nothing goes wrong is the only hope you have. And I can not imagine being without work or some kind of income for extended periods(like forever). I’ve always had the outlook that things will get better and so far they have, even if better is only relative and still not good. But I’m closer to understanding how much it is that this outlook is a luxury that many just can not afford.

  33. 33
    TriassicSands says:

    For every vulnerable human being there’s an American corporate predator/parasite just waiting to pounce.

    I had a long conversation with a German neurosurgeon last year and he was gobsmacked at the idea that an American could be forced into bankruptcy because of medical bills. Such a thing would never happen in Germany and they would consider it a national embarrassment if such a thing did happen. Here it’s just business as usual.

    The idea of renting tires and paying three times their retail price because you can’t afford the lump sum price, but can afford the monthly amount is simply disgusting. I’m sure the people who provide this great “service” would claim they are actually great humanitarians, making it possible for people to get things they couldn’t otherwise have. Yeah, and paying pennies a day to workers in Bangladesh is also a great kindness, because those lucky duckies wouldn’t have any job if they demanded a living wage.

  34. 34
    Capt. Seaweed says:

    Yeah I got a set of used tires for my Honda offa Craigslist for free. So far they’ve lasted 4 years. There are always alternatives to Rent-a-Center.

  35. 35
    bjacques says:

    That value can still be extracted from them proves they’re not really poor. Why, they’re positively rich in spare body parts, plasma and womb space. Maybe not top grade and won’t fetch top dollar, but that’s because they don’t have the gumption to take better care of themselves.

    ETA: From watching the BBC, I get the impression the UK is just about as bad.

  36. 36
    satby says:

    @Capt. Seaweed: And to be able ro use craig’s list you needed to be tech-literate and have access to a computer and internet connection.

  37. 37
    cvstoner says:

    Soon to follow rent-to-own: direct-to-debtors-prison.

  38. 38
    Ben Cisco says:

    A few years back, at my last job (but prior to my arrival there), the Engineering department got a front-row seat to a rim repossession. Dude came out at the end of his shift to find his truck on blocks. He had to get it towed.

    Word was that he quit that day.

  39. 39
    Cassidy says:

    yanked off you by some thug

    They’re poor people just tryin’ to make a living too. I used to work for a “sales and lease” company. The people who do the calling and repossessing don’t get paid a lot.

  40. 40
    Todd says:

    Tire rental contracts are so ironclad that even a bankruptcy filing can’t make them go away.

    This part of the article is bullshit. The finance folks have tried to write “nondischargeable” into the fine print, but it won’t stick.

  41. 41
    Cassidy says:

    All this being said, tires are way too damn expensive.

  42. 42
    rikyrah says:

    this is pitiful

  43. 43

    A lot of usury laws got repealed when the prime rate went over 20% back around 1979-81. If a state had a law saying any rate above 24% was usurious, then when the prime was at 21.5%, there was no room to up the rate to allow for risk.

    What they should have done was adjust the usury rate to the prime rate, but what many states did was to simply repeal their usury laws altogether.

  44. 44
    Mike in NC says:

    Mitt Romney is tearing his hair out because he didn’t come up with this idea first.

  45. 45
    Gian says:

    I’ve bought used tires. you can buy them. people replace tires sometimes while they are still useful. (returning lease vehicles, whatever) and the tires can have a good 10-20 thousand miles on them before failing the penny test if you’re lucky.

    It’s not optimal, but back when I had to do it it was about $50 per tire for the premium brands used, less for the cheaper ones

  46. 46
    Nina says:

    If a prison guard makes so little that he can’t afford to buy new tires he has to rent them, and the inmates say they can get him some scratch if he just smuggles in a few cellphones and cigarettes…

  47. 47
    Forum Transmitted Disease says:

    Next up for the poors (and I’ve got a patent on this, so none of you fuckers take it cause this is my ticket to Galtian paradise): used food stores.

    If it was good enough for me to eat, it’s good enough for them.

  48. 48
    negative 1 says:

    Remember when people thought that loan sharks were scum and that the mafia were crooks for preying on desperation and people trying to get a foothold into society? Mafiosos wished they charged at the rates that payday loan folks do.
    What’s frustrating is simply reinstating the old usury laws would eliminate about 90% of this problem.

  49. 49
    Anna in PDX says:

    @Villago Delenda Est: Yes, this is a very good thing about Oregon, but those damn Rent a Centers are still plying their evil trade. My partner and I talk about this every few times we drive down Lombard (we live about a block from it so we drive down it very frequently) – payday loan place is gone, but the rent a center and the pawn shops are still there next to each other – Chris (who works with an agency that helps homeless senior citizens) calls them “poverty pimps”.

  50. 50
    opiejeanne says:

    Rent A Centers? It’s been more than 20 years since I visited one, and that was to rent a piece of equipment I needed just for the day, a big rototiller. They’ve changed, I guess.

    We bought retreads for a beat up old truck we used to own, about 40 years ago. That was partly because we couldn’t afford new ones and partly because we were afraid new tires would outlast the vehicle. Are retreads still sold for cars?

  51. 51
    TG Chicago says:

    Devil’s advocate time: so if this tire rental thing didn’t exist, what would the Cherrys do instead? They simply can’t afford to buy new tires. Patching doesn’t help since it’s not a single puncture — it’s the entire tire that’s wearing out. Without rental tires, they might run on their old tires until one blew out on the highway. That’s not good for anybody.

    The only other option I’ve seen in this thread is Gian mentioning used tires. That’s probably a better option… if the Cherrys can afford them. But they probably cost more than $14 total, which is all the Cherrys had to pay to the rental place (per week, for ~80 weeks).

    If all you can manage is $14 per week, then this is probably your only option. And in a sense, the Cherrys are lucky to have the option. (they also have the option of going carless, though I imagine that would impose serious burdens as well)

    I’m not trying to defend the predators here. I’m just saying: what’s the better option?

  52. 52
    Dick Woodcock says:

    Automotive salvage yards!!!!

    They always get wrecked cars with good tires. I got my last set of tires for $30 a piece, and they were basically brand new. One of the local tire shops mounted them for $20.

    $140 for an almost brand new set of tires, mounted. That’s something you should be able to afford, even if you have to buy them one at a time.

  53. 53
    opiejeanne says:

    @TG Chicago: See the comment directly below yours.

    And I don’t know if retreads are still an option, but they worked for us.

  54. 54
    TG Chicago says:

    @opiejeanne: That option would not be available to someone who only could afford $14 per week. I don’t think you understand their position.

    Now if they can wait 10 weeks or so before getting tires, they could save up the $140 needed. But what if a tire blows in that 10 weeks?

    There are basically two options here: that the Cherrys know what they’re doing or they don’t. I don’t know which it is. But if they know what they’re doing, then this was the best option for them. If they don’t, then I don’t have much sympathy for them.

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