Is renting things for your home a
It can be expensive to buy a new appliance like a
fridge or a washing machine, so it might seem like a good idea to
rent one instead. The problem is, when you rent, even though you
only pay a little bit every week or fortnight, the costs can really
add up over time.
Here we show you how to make sure you don't get ripped off when
renting things for your home.
How does renting work?
You can rent things for your home, like a TV or washing machine,
by signing a document called a 'consumer lease'.
Under this agreement, you will usually need to make small payments
every week or fortnight until the agreement finishes. You might
have to keep making these regular payments for a long time -
sometimes up to 4 years.
Consumer leases are sometimes advertised as 'rent to own' or 'rent to buy' products. However,
because you are renting the item, you don't own it at the end of
the lease. Some rental companies might let you offer to buy the
items for a small additional cost. However, by this time you might
have already paid more than three times the cash price of the
Renting can be
Renting appliances can cost you a lot more than you might think.
By making small payments for a long time, renting an item can end
up being the most expensive way of getting the things you want.
The payments you make under a consumer lease might seem small
compared to the cost of buying the item, but when you add up the
total cost of renting, it is much cheaper to buy it instead.
Work out the real cost of renting things for your home.
Rent vs buy calculator
Case study: Leanne rents a dryer
When Leanne's washing machine broke down, she didn't have $450
buy a new one, so she decided to rent one instead. She signed a
consumer lease agreement where she had to pay $20 every fortnight
for 2 years. When the lease ended, Leanne used MoneySmart's rent vs
buy calculator to work out that she had spent more than $1,000
to rent it. This was more than twice what she could have paid to
buy one instead.
If you need a fridge, washing machine or bed and don't have the
money to afford it right now, renting is not the only way to get
Here are some other ways to get the things you need:
Shop around before you rent. You might find the same item
for a lower price somewhere else. Compare the total cost over the
rental agreement, not just the fortnightly payments.
- Save up for it - If you don't need to get the
item straight away, set aside some money each week or month to save
up for it. Check out our pages on budgeting and saving for tips on
starting a budget and sticking to it.
- Put it on lay-by - Some shops will let you buy
things on lay-by and pay it off over a period of time. The shop
will keep it until you have paid it off. See our page on different
ways to pay for more information on laybys.
- Apply for a NILS loan - If you are a low
income earner, you might qualify for a no interest loan scheme (NILS)
loan to buy what you need. This type of loan means you only pay
back exactly what the item costs.
Only rent what you came
If you decide to rent something, you might find that the
salesperson offers you other things to go with the item you want.
For example, if you are renting a TV, they might offer to throw in
a DVD player or a games console for a little bit extra. This is
Do you really need the added extras?
Focus on the item you came for. Any additional items will only
mean you end up paying more. You don't have to get any extra items
just because the salesperson offers them to you.
Read your rental
You will have to sign a consumer lease agreement
when you rent an item. This will tell you the rules you need to
follow while you are renting the item. These rules are called
'terms and conditions'. The terms and conditions of this document
can be complicated, so read it carefully to make sure you
understand it before you sign. Ask questions if you are not
Find out what the fees are, and whether there will be any extra
fees if you miss repayments, cancel the agreement or pay it off
If you cancel a lease, you may still have to make the rental
payments for the full term of the lease. Check all the terms and
conditions of the lease.
Case study: Martin wants to end his consumer lease
Martin signed up for 2 years to rent a TV for $25 per
fortnight. Six months later, when Martin's girlfriend moved in with
him, she brought her own TV. They didn't need both TVs, so Martin
called the rental company to stop his lease. They told him he still
had 18 months left on the lease and he would have to pay $926 to
cancel his agreement. This is the amount written in the 'early
termination' section in the lease agreement. Martin was annoyed, so
kept the TV and had to pay for it even though he didn't need
Check your rental statement
The company you rent the items from must give you a statement
every 12 months showing what payments you have made. If you want to
receive this statement more often to keep better track of it (say,
every 3 months or 6 months), you can ask them for this.
What happens when your lease
At least 90 days before the end of your lease, the company must
give you a statement showing:
- When your lease is due to end.
- When, where and how to return the item you are renting.
- How much you will have to pay in fees or penalties if you do
not return the item by the due date.
- Whether they will let you buy the item you have been renting,
how much it will cost, and who you need to contact to buy it if you
Don't leave it to the last minute to decide what you will do
when the lease ends.
Check your bank account carefully when your rental agreement
ends. If you have returned the things you rented, you should not be
charged any more rental payments. If you have been charged, contact
the company straight away.
Renting appliances can be an expensive way to
get what you want. Before you sign a consumer lease, make sure it's
right for you.
Last updated: 18 Oct 2017