Can't afford new tires? Rent them at a premium

Bald rubber and sparse cash lead workers who must drive to a growing industry.

By Bruce Kennedy Jun 11, 2013 7:21AM

Image: Car tire (© Sarah M Golonka/Brand X/Getty Images)The overall economy may be improving, but a lot of people are still scrambling to make ends meet. If you rely on your car to get to work, you might be willing to skimp on a lot of things -- but tires probably aren't among them.


With that in mind, a new and lucrative industry has sprung up: rent-to-own tire companies that allow you to roll away on new rubber for a minimal down payment.


In general, the rent-to-own industry has been thriving since the economic downturn began as people who can't qualify for traditional financing look to alternatives. The combination of no credit checks, small down payments and a no-questions-asked return policy has worked well for people in need of furniture or electronics. According to the Los Angeles Times, it has fueled what's now an $8.5 billion industry.


But analysts say that unlike with furniture or electronics renters, workers who take the rent-to-own tire route are shopping for ways to keep themselves employed. According to the Times, as median household income has fallen, the number of U.S. households with credit histories too damaged to qualify for credit cards has risen to 35% from 27% five years ago.


"Tires are a necessity," University of Houston law professor Jim Hawkins told the newspaper. "These customers are vulnerable because they have no choice."


That lack of choice sometimes pushes consumers into deals with huge interest fees and payment deadline penalties that can ultimately make that set of rented tires cost three or four times the average retail price. And these rent-a-tire companies have aggressive collection and repossession practices for people who fall behind on their payments.


Still, business is booming. Rent-A-Wheel/Rent-A-Tire operates 88 stores in 11 states and expects to top 100 locations this year. Company President Matt Seaburn told Tire Business that about a third of his customers buy tires and wheels upfront and another third use a 90-day payment option.


"Then the rest of the customers go on rent-to-own," he added, "and a majority of those customers do end up buying it at some point." Seaburn notes that some customers prefer to rent perpetually, to keep up with the newest automotive trends and styles.


"They are interested in the latest and greatest product," he said, "and so maybe every several months or so, they're asking about what's new that they can put on their car and they'll return the product that they have and just put on what's new."


More on moneyNOW

18Comments
Jun 11, 2013 11:27AM
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Just another hamster wheel for people that don't manage their resource correctly. How can renting be better? They have to pay for the tires and coming to repo their tires. People have just enough to make the payments but you will never own your own dang tires. TIRES! Buying your tires even used ones will be cheaper than this in the long run.
Jun 11, 2013 10:51AM
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Would kind of suck if you miss a payment, come out of your house to go to work, and find your car sitting on four cinder blocks. I found a good deal on tires at eBay, of all places. Probably saved about $300.
Jun 11, 2013 12:14PM
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if u cant afford tires you cant afford a car !!!!
Jun 11, 2013 2:37PM
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rent to own is such a rip.  I used to drive a truck for a rent to own company.   a struggling couple rented their washer/dryer, had made timely payments for approx 12 months, fell on hard times and I was supposed to repo them.  I was given the file and found out the washer/dryer was paid for after 7-8 months.  I refused to repo them when I got there and saw the woman working her butt off, plus there was a load of diapers in the washer & dryer.  got fired but I didn't care to be part of this business that preys on struggling people.  wish I had an extra washer/dryer to give to this couple.
Jun 11, 2013 12:55PM
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This is how the rich keep us as slaves they start a payment program for everything and never pay enough to allow you to pay things off as they come up.
Jun 11, 2013 12:26PM
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Cheap no name tires have gotten so good lately there's just no reason not to grab (purchase!) a set for around $50 per tire.  I don't like them and personally would rather have quality tires, but still I tell friends that care nothing about performance to go ahead and get the cheapies which are always better than the bald tires they will replace. 
Jun 11, 2013 11:38AM
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Tires are the most important part of your vehicle. They affect stopping distance, ride comfort, stability, handling, fuel consumption, and most of all SAFETY. A person should never look for the "bargain" but instead look for the right tire for your vehicle. Car Manufacturers work with Tire Manufacturers to build tires specifically designed for vehicles. This is important because the wrong tires or wheels can cause many more issues later and often very costly. 

Jun 11, 2013 1:56PM
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What ever happened to getting slightly used tires at the junk yard?

 

I guess they don't sell 22" low pros.

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All of this will just have thieves stealing tires and selling them for a lot less to those who don't have the money to buy new.  Then probably the thieves will steal them back for someone else.  This all is a no win situtation and makes crime rampant.
Jun 11, 2013 1:02PM
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A sign we're on the right track, definitely.
Jun 12, 2013 9:53AM
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the tire companies could save the consumers and themselves millions of dollars if they would standardize sizes and go back to normal speed rated tires. I have been in the tire business for 37 years and seen prices skyrocket because auto and tire engineers  believe in wider and high speed rated tires  are better when  they are worse when it comes to hydroplaning and driving in snow.  bring back the  14 and 15 inch 75 and 70 series tires save money,fuel and lives. having 60 through 40 series tires rated for 130 to 200mph are great for race cars not passenger cars. thnx george
Jun 11, 2013 11:37AM
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Where it may sound good, it isn't a great deal unless you got a lot of money. But let's say you just need one tire and short of cash. That might be a great deal. Then you can pay that one off quickly. There are better deals on the Internet though. There are places where you can buy a whole set and pay for the Shipping and handling yourself. Then take then to a place that has air to put them on. Many places want your business and will at a charge align them for you. You may even be able to get them to put the new tires on, even if you didn't buy them from them.
Jun 30, 2013 12:10AM
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Maybe the "poor" folks that put 24" chrome wheels and fancy tires on their car should donate their original wheels and tires to those who are really in need.

 

Too many "poor" people suffer from a horrible sense of priorites.  Rather than focusing primarily on feeding, clothing, and housing themselves reasonably (and often their children too), they are more interested in putting on a daily "show" to passersby and people that they don't even know- to appear to be better off than they really are.  Image and creature comforts are more important to them than stability and savings.

 

Too many "poor" are running around buying designer shoes, jewelry, flat screen tv's, smartphones, shiny wheels, etc, but they have no savings to speak of and count on a govt. handout for their next meal.

 

These tire rental places are just another way to get a set of expensive wheels for the buyer who is not responsible enough to save up for them, but needs instant gratification.  Just like the Rent-A-Centers of the world- they sell more 60" TV's than practical (and necessary) home furnishings.

Jun 11, 2013 9:57PM
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we as people don't own anything we just buy time on it until time runs out so go out there and love life help a stranger feed a stray animal talk to god and be kind to each other
Jun 11, 2013 10:59PM
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Small service or repair Garages along with a few Stations; That are in the tire selling on the side,

may have some decent take-offs.

Normally they are quite reasonable.....And good for maybe 10 to 20,000 miles...

Some people( more wealthy) upgrade or replace when they really don't need to...imo.

 

The Garages also don't have to pay for disposal either, or as much.

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