Skip to content

Rent to Own - Personal Finance 101 Chat

Personal Finance icon

Follow along as a father and son discuss rent-to-own plans and the contracts and costs that go along with them.

Find quick answers to frustrating personal finance questions that pop up now and again in our Personal Finance 101 Chats series. Choose a topic and watch a short (pre-recorded) instant-messaging exchange with a financial expert.

Please note: Due to recent upgrades to some internet browsers, the Personal Finance 101 Chats may not work well for all users. We suggest using the chat transcript below as an alternative to the chat application.

Launch the chat

Rent to Own

Spanish version / versión español

Chat Transcript

Kyle: Hey mom! Do you have a minute to chat?

Mom: Yes -- I am eating my lunch at my desk. What's up?

Kyle: Scott, Todd, Patrick and I are moving into a house in the fall. No more dorms!

Mom: Well, that will present you with a lot of new decisions.

Kyle: Todd thought it would be a good idea to rent some furniture that we need and a television from Rent-to-Keep Center.

Kyle: What do you think?

Mom: Have you thought about other options?

Kyle: Like what?

Mom: Collecting some used furniture from family members or buying things from a charity outlet.

Kyle: Used furniture-- not cool!

Mom: Maybe not cool-- but cheap.

Kyle: Okay-- I guess we can all take a look in our basements or check with our grandparents. But we still need a television.

Mom: Have any of you been to the Rent-to-Keep Center?

Kyle: Yeah, we swung by there to scope out the TVs and right away, the guy wanted us to sign a contract.

Mom: So do you know what a contract is-- what it means?

Kyle: Kind of, yeah.

Mom: You know about competent parties, consideration and mutual agreement?

Kyle: Uh?

Mom: A contract is a legally binding promise between parties that is enforced by law. You know-- professional football players have contracts with their teams. We had a contract with the painter who painted the outside of the house-- things like that.

Mom: There are key elements to understanding a contract-- competent parties, consideration and mutual agreement.

Kyle: Uh, okay. Do I need to know this?

Mom: Yes, you do. People who are involved in a contract must be able to understand the conditions they are agreeing to. So someone who is mentally challenged might not be considered a competent party. And, usually, people under 18 may not enter into a contract without the parental consent.

Kyle: I'm not sure I understand what YOU just said!

Mom: Consideration is something of value given by each party in a contract. The painter painted the house and we paid him.

Mom: Mutual agreement means that each party must clearly understand the essential details of the contract. This is just fancy wording. It means you should understand the rights and obligations outlined in the contract.

Kyle: I guess the first thing we have to do is read the contract-- right?

Mom: That would be a good start. And, don't sign anything until you talk to me and the other guys talk to their parents.

Mom: Why do you want to rent-to-own instead of buying a television?

Kyle: We don't have the money to buy a big, flat screen right now-- but rent-to-own lets us get it right now. We don't even have to put any money down!

Mom: Okay-- what would the monthly payment be? And, how many months would you have to pay before you owned the television?

Kyle: Well they said it would be $159.20 for 12 months. Then it would be ours.

Mom: According to my calculator that's $1,910.40. How much if you just went to a store and bought the television-- Google it and find out.

Kyle: Okay, give me a minute.

Kyle: Uh, well we could buy the same television for $1,449.50. Wow-- that's nearly $500 less!

Mom: And what would happen if you missed one of the Rent-to-Keep payments?

Kyle: We'd have to return the television.

Mom: Do you still think this is such a good idea? Maybe the four of you can figure out a better way to purchase a television.

Kyle: Okay, I'll talk to the other guys. But at least with Rent-to-Keep we could have the television right away.

Mom: Yes, you could-- but you could each save some money over the next few months and have the television for much less than the rent-to-own approach.

Kyle: Maybe you are right-- again.

Mom: Nice to know!


If you have difficulty accessing this content due to a disability, please contact us at 314-444-4662 or

Search for Related Resources

Audience:   High School, Consumers, Middle School, College
Language:   English
Subjects:   Personal Finance
Resource Types:   Multimedia
Concepts:   Non-Bank Financial Services, Credit