If you want to get a new computer you can either purchase it outright with cash to take full ownership or make regular payments per a leasing agreement. The latter arrangement is most common for a business computer rental. One other option that a computer shopper has is to enter into a rent-to-own agreement.
Description
A rent-to-own computer agreement is a borrowing arrangement where you make regular lease payments for the computer then opt to purchase it with cash after the term is up. The computer manufacturing company or an associated computer financing company sets up the leasing contract. The financing company owns the computer during the term of the lease, but if you decide to buy the computer the contract changes into a purchase agreement and you take over full ownership.
Process
To enter into a rent-to-own agreement for a computer you must first fill out a lease application and pass a credit check. As with any lease agreement, you must also provide information about your personal or business income as well. Upon approval, the computer leasing company determines a monthly rental fee based on the cost of the computer, the results of your credit check and the length of the agreement. You must sign a lease agreement that contains a clause regarding buyout terms. This clause includes the estimated residual value of the computer, which in most cases is equivalent to the offered buyout purchase price.
Benefits
A rent-to-own computer agreement is useful if you do not have the money to purchase a computer at this time but you need to use one regularly now. You can then buy the computer when you have the money later. Also, when you rent-to-own you have the opportunity to test out the computer to make an educated buying decision. If the computer becomes obsolete you can simply opt-out of buying. Some computer financing companies even offer $1 buyout offers, where you can buy the equipment for just a dollar after the lease is up. But keep in mind that a rent-to-own agreement containing a $1 buyout offer commonly comes with a higher monthly rental fee.
Downsides
Though rent-to-own computer arrangements have benefits, they also come with a few key downsides. For one, you spend more for the computer when you lease compared to buying the equipment upfront. Also, you have to finish paying the lease even if you no longer need the computer. If you opt not to purchase the computer after the lease period, you may have to pay lease end fees if you don't return the computer in acceptable condition.
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