Household Items: Renting vs. Buying
Meet Josh. He is 23, living on his own, has a good job and unfortunately was hit by the devastating Queensland floods last year.
All of his possessions were washed away and he had to replace them after finding a new place to live.
But instead of buying everything again, he decided to rent them.
And he is not alone. A recent survey by Mr Rental found that 72 per cent of 18-25 year olds surveyed wanted better household items, including the latest technology. And one way to get that was to rent.
Of course, who wouldn’t want better household items? And while renting them is a quick way to get them, is it a cost-effective way?
So, is Josh doing the right thing?
I had a look on a leading rental company’s website and found a few regular household items you would find in your typical home.
Over a 24 month contract, renting what the rental company calls an “Essentials Combo Pack”, which includes a medium-sized fridge, washer, dryer, microwave and a 32” LCD TV, costs $51.80 per week to rent, or $5,387.20 over a 2 year contract.
I did a little Googling and the same items, if you bought them outright, would cost approximately $2,100. That’s a difference of $3,287.20!! That’s a lot of money to be “throwing away” on renting.
But are there advantages to renting over buying?
No maintenance costs
You never have to call out and pay for a repairman to come a fix your stuff as one call to the rental company and they will fix it for free or replace it.
Upgrades
You can upgrade to the latest technology at any time, which may be important to you.
Freedom
You own less stuff and so you are much freer as to where you live and it costs less if you were to move.
Cash Flow
Paying for household items over time as opposed to buying everything up front has an appeal to it, at least in the short run.
Not So Advantageous
If you dig a little deeper however, those advantages may not be so advantageous.
While all the above advantages seem reasonable, over the long run you are still paying out over 160% more for the same items (at least in our example).
And contents insurance would cover you in case of floods, fire, theft or other loss of your household items, and warranties (and extended warranties, if you are inclined to pay a little extra) would take care of most faults.
As for upgrading, do you really need the latest and greatest version?
Even factoring in the costs of insurance and extended warranties, you would still be much better off buying items than renting them.
And with so many stores offering interest-free periods for most household items there seems to be no barrier to buying what you need.
What are your thoughts? Have you ever rented a household item before?
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