Can't afford new tires? Rent them at a premium
Bald rubber and sparse cash lead workers who must drive to a growing industry.
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."
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.
What ever happened to getting slightly used tires at the junk yard?
I guess they don't sell 22" low pros.
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.
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.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
More Market News
With the universe of this category in its seasonal sweet spot, these picks have tailwinds propelling them into the new year.