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High Prices Are Driving Motorists To Rent Tires

searcher

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#1
High Prices Are Driving More Motorists To Rent Tires

Chains such as Rent-a-Wheel and Rimco are seeing business boom. Many consumers pay double or triple the cost of buying and face aggressive repossession policies.



By Ken Bensinger, Los Angeles Times
June 8, 2013, 8:00 a.m.



When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn't afford to buy a new set.


So they decided to rent instead.

The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.

"I know you have to pay a lot more this way," said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn't using it to get to his job as a prison guard. "But we didn't really have a choice."

Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.

Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation's economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can't get a loan anywhere else. But that access doesn't come cheap.

Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can't make them go away.

Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.

It's also a booming business for specialized tire and wheel dealers that have become beneficiaries of a struggling U.S. economy. Fast-expanding chains with names like Rent-a-Wheel and EZ Rims 4 Rent that got their start selling high-end rims to car enthusiasts have discovered a lucrative market selling tires on time.

"We see tremendous opportunity serving people who are just looking for dependable tires to get to work," said Larry Sutton, founder and president of Rent-N-Roll. The Tampa, Fla., chain has 66 locations nationwide, including two in California, and plans to open six more this year.

Sutton registered the trademark RNR Tire Express last fall and has been rebranding many stores to focus on tires instead of the oversized chrome rims that were the chain's mainstay. Today, Sutton said, tires make up two-thirds of RNR's sales, up from less than half several years ago.

A host of economic factors are pushing the growth of tire rentals.

Soaring costs for natural rubber and petroleum used to manufacture tires have pushed up prices. The average price of a passenger tire in the U.S. increased 57% in 2012 from 2006, according to data from trade publication Modern Tire Dealer. The prices on some popular sizes have more than doubled.

Consumers, meanwhile, have an increasingly difficult time affording big-ticket purchases.

Since 2009, median household income has fallen more than 5%. And in the wake of the recession, the number of households in the country with credit histories too damaged to qualify for most credit cards has risen to 35% from 27% five years ago.

With more people shut out of traditional financing, the rent-to-own industry has flourished. Promising no credit checks, small down payments and the option to return merchandise at any time with no questions asked, chains such as Rent-a-Center are raking in huge profits from a customer base that's swelled to 4.8 million people, up 67% since 2007, according to the Assn. of Progressive Rental Organizations.

Tires account for just a tiny slice of the $8.5-billion rent-to-own market. But they stand out from the industry's traditional fare because — unlike with a dinette set — giving back tires means not being able to drive to work.

"Tires are a necessity," said Jim Hawkins, a University of Houston law professor who studies the alternative finance industry. "These customers are vulnerable because they have no choice."

The first rent-to-own tire and wheel dealers appeared in the mid-1990s, targeting young urban males looking to spiff up their rides. Chains enlisted rap personalities such as Snoop Dogg and Busta Rhymes to hawk shiny customized rims and low-profile tires.

But after the economy crashed, dealers saw an influx of customers asking for standard passenger tires. Many new patrons were older and a surprising number were women, a group the industry had all but ignored.

Michelle Collins of Denham Springs, La., made her way to a Rimco store after her long-unemployed husband found work.

The tires on their Chevy Silverado were in terrible shape, too dangerous to be used for the long drive to his new job as an industrial painter. But they were such an odd size that the cheapest replacement set cost $1,340 at a regular tire store, far beyond Collins' budget.

The Rimco salesman said he'd get her rental tires for the same price and almost no money down — so long as she paid them off within 120 days. What Collins didn't realize was that the cost would skyrocket if she missed the "same-as-cash" deadline.

She found out the hard way.

This spring, Collins, who owns a used-book store, made her 18th and final monthly payment of $164.10, bringing the total price for the tires to nearly $3,000. That works out to the equivalent of more than 120% annual interest, quadruple the highest credit card rates.

"We couldn't risk losing the job over tires, no matter what the cost," said Collins, 40, who has five children living at home.

Like other tire rental stores, Rimco is undergoing a transformation thanks to changing customer demand.

Four years ago, 70% of Rimco's sales were aftermarket rims and the rest were tires; today that ratio is reversed. The chain, a unit of Atlanta rent-to-own giant Aaron's, has 28 stores and plans to open seven more by year's end.

The market leader is Rent-a-Wheel. With $100 million in sales, the company last year ranked as the nation's seventh-largest independent tire dealer, according to Modern Tire Dealer. The chain operates 89 stores branded as either Rent-a-Wheel or Rent-a-Tire, including 13 in California, and has aggressive expansion plans.

"It's a very young industry, but it has a lot of potential," said Matt Seaburn, president of the Los Angeles chain that was founded in 2006. "But we have to be careful about where we operate, who we deal with and how we deal with them."

Customers and employees of tire rental stores said that often translates to aggressive collection practices.

When Birdie Smith and her daughter rented four tires for their Infiniti sport utility vehicle at the Inglewood branch of Rent-a-Wheel, they were reminded they had to pay $41.90 every Saturday, in person.

But money was tight and they eventually missed a payment. Smith, who lives in South Los Angeles with her daughter and three grandchildren, was shocked to see a squad car pull up to their house a few days later.

"The police said we owed Rent-a-Wheel money and we'd better pay up," said Smith, a retiree who lives off Social Security income. Smith eventually paid off the tires in full, she said. "Those Rent-a-Wheel guys drive a hard bargain."

Police involvement is rare. But since rental companies technically own the merchandise until the last payment is made, some in law enforcement consider failure to pay tantamount to theft. Some contracts contain clauses allowing the dealership to enter a customer's property to repossess.

In Texas, where state law is favorable to rent-to-own companies, the Fort Worth Police Department has a special form just for stolen rental property claims. One section of it reads: "Has renter been told that a police report will be made and criminal prosecution will be pursued if property isn't returned?"

Dealers say they're sympathetic to customers' financial struggles, but they defend their tough tactics. To rent tires to people with bad credit, they have to assume risk that traditional lenders wouldn't — and their collateral can drive away.

Eric Malone, who owns eight RimTyme stores in North Carolina, Virginia and Georgia, was drawn to the business by the high profit potential. RimTyme averages more than $1.4 million a year in sales across its 25 locations, nearly double the take at parent company Rent-a-Center's traditional furniture and electronics stores.

His employees make about three repossessions a week. Malone said some new customers file for bankruptcy protection soon after getting new tires, hoping to shed payments and dodge the repo man. But they quickly learn that because they signed rental contracts, not loans, those can't be modified or discharged in court.

"Bankruptcy is just another way to get over," Malone said.

Don and Florence Cherry, the North Carolina couple who rented their tires from Rent-N-Roll last fall, filed for Chapter 13 bankruptcy protection after making just three payments on their tires.

A representative of Rent-N-Roll argued successfully in court that this was one debt that couldn't be negotiated: They could either "return the tires or pay them out."

They kept the tires.

"When you're working paycheck to paycheck, your options are limited," Florence Cherry said. "These tires were a lifesaver at any price."

http://www.latimes.com/business/autos/la-fi-rent-a-tire-20130609,0,2490443,full.story
 

Joseph

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#2
The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.

"I know you have to pay a lot more this way," said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn't using it to get to his job as a prison guard. "But we didn't really have a choice."

Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.

Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation's economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can't get a loan anywhere else. But that access doesn't come cheap.
Am i missing something ?
I'm on a life long budget, but when I opt to spend money, $400 -$600 for a set of tires is a much better deal than $982.60

Maybe I don't know the whole story, but I think if I knew my tires were going bad, I would have put away $60.00 - $100 a month starting 6 months ago ...


PS - I love that : " alternative finance sector focused on the nation's economic underclass"

translation: another financial enterprise dedicated to sucking the life's blood out of what's left of the middle class America. When they have it all, they can throw those people's lifeless husk of a body into a dumpster and lock on to the next jugular vein that presents itself
 
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Rcpb2000

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#3
What's confusing is the Title of the OP states high prices as the cause of rentals but the price of new tires doesn't seem steep or "higher" at all!
 

GOLD DUCK

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#4
QWAK,You just got to figure :hmmmm2: a lot of them people who rent to own tires --- came in to this world because of RENT to OWN "CONDUMS" that got REPOSESED:idea: --- fell sorry for the REPO MAN!:ahhhhh::afraid::cry_smile::cheerful:

Working all day in a bio hazard sute --- reposesing used condums is an awfull job!:ahhhhh::ban-cha::banana:

the DUCK :s9:
 

ttazzman

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it would be intresting to see one of their "iron clad " contracts.......its difficult to imagine repo'ing tires but leaving the owners rims behind.........and safty concerns would be intresting....IE who is liable if a tire blows out and kills someone...etc.
 

TAEZZAR

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#6
These people are in this dilemma because they live day to day without thinking ahead, like Joseph said,
I think if I knew my tires were going bad, I would have put away $60.00 - $100 a month starting 6 months ago ...
I will bet by bottom buck that these "renters" drink alcohol, smoke & probably do a little more than that.

I will bet you, they feel "entitled" to the pleasures they bestow up themselves, instead of living within their means.

One of my favorite sayings seems appropriate here.

We are all where we want to be, plus or minus a little bit.
When it gets to where we don't like where we are at,
We will change it.


I don't feel sorry for habitually down & outers.

I do feel for those that have suffered trauma in their lives that has created a financial hardship. These are the people that need a hand up not a handout.
 

EO 11110

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#7
aren't they more renting the rims than the tires?

a good indicator of being in a sh-thole -- the number of cars you see with aftermarket rims

look at it from the customer's point of view --- he can change his rims every so often to change the look of his ride

i considered doing a business like this long before the chains were started. the deal killer for me? clientele
 

gringott

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#8
aren't they more renting the rims than the tires?

a good indicator of being in a sh-thole -- the number of cars you see with aftermarket rims

look at it from the customer's point of view --- he can change his rims every so often to change the look of his ride

i considered doing a business like this long before the chains were started. the deal killer for me? clientele
Clientele? Young urban male? What's not to like?

Rent to Own Tires. I thought I saw it all. Just buy some frigging tires at a yard sale or some used ones.
How moronic can you be???????? It costs me almost $30 a rim to mount tires on my "larger" rims, believe me, once it goes on it ain't coming off until it's bald. No point mounting anything but a new tire. Plus the one garage told me they stopped mounting anything but new for liability reasons.
 

EO 11110

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#9
Clientele? Young urban male? What's not to like?

Rent to Own Tires. I thought I saw it all. Just buy some frigging tires at a yard sale or some used ones.
How moronic can you be???????? It costs me almost $30 a rim to mount tires on my "larger" rims, believe me, once it goes on it ain't coming off until it's bald. No point mounting anything but a new tire. Plus the one garage told me they stopped mounting anything but new for liability reasons.
rims with bling are expensive. and then you are stuck with them. instead, rent 'em and change 'em at your pleasure from rimco, etc
 

searcher

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#10
What's confusing is the Title of the OP states high prices as the cause of rentals but the price of new tires doesn't seem steep or "higher" at all!
I think what Ken Bensinger meant was that due to the price of tires being high that there are sone people who simply can't come up with the scratch for replacement tires. And they probably can't use plastic to buy them. That's why they are dealing with "rent to own tire places."

One thing: I go along with Joseph & Taezzar...........if you have a car you need to realize that things break and tires need to be replaced. You should keep money put away for this. And if you don't have a lot of cash coming in, look for places where you can cut back on the cash going out.

And as Gringott said.............you can always buy used (private, junk yards and used tire shops.)
 

EO 11110

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#11
it's just in house financing

let's go to the source -- https://www.gorimco.com/t-purchase-options.aspx

120 Days Same As Cash++

Own it in 120 days with Rimco's incredible 120 Days Same As Cash Program! Pay off your rims and tires early and save! No penalties for paying out early at Rimco! All you need is a source of income, a place to live, and a few friends.

Lease To Own

You can own your custom Wheel/Tire Package in as little as 12 or 18 months with low monthly payments. All you need is a source of income, a place to live, and a few friends. Everyone is pre-approved at Rimco!

Rimco also offers a 'Tire A Month Program' for your family car tire needs! You can own a set of original replacement tires for your family vehicle with just 4 monthly payments!

Retail Cash Today

Pay in full at the time of purchase and receive even a bigger discount at Rimco!

Tire Pressure Monitoring Systems - TPMS

Worried about the TPMS on your new vehicle? No problem at Rimco! Rimco will install your TPMS sensors in your new custom wheels for only $99.99!

Road Hazard Program

Rimco has a Road Hazard Program available to all customers whether your leasing or buying retail today! Your always covered at Rimco!
 

bb28

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This is absolute insanity. I buy about eight tires a year.

I live on a mountain at high altitude and all of the roads are windy, include blind curves, and some extreme slopes.

When it rains, the rocks fall off the cliff walls and litter up the roads. Some of them are basketball sized, others are as large as an entire engine. When it rains and fogs, you're lucky if you can see 10 feet ahead of you, much less what rocks you're about to run over. The bumps in the road knock out the alignment frequently which ends up destroying the tires. And, my regular off-road trips for hiking don't seem to help the situation. The alignment generally goes out once a year and needs to be re-done.

I stopped buying new tires a while ago with the realization that the tires would wear out due to uneven tread long before the lifetime of the tire so I buy used all the time.

For two vehicles, $25 * 8 = $200 + $60 for an alignment. I know this will be an annual cost, so it's just something I plan for like my monthly bill for gas, oil changes, and new brake pads every year or so for the cars.

If I was really desperate, the junkyards have 50% off tire days every once in a while and I could show up there and stock up in advance.

How stupid can you be to "rent" tires?

bb
 

southfork

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If business like this flourish it kind of diminishes the recovery claim does it not.
 
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GOLDZILLA

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I think I'm gonna start up one of these places. I will call the business RIMJOB.
 

TnAndy

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Just when you think you've heard it all, you haven't......rent tires ? Seriously ??
 

glockngold

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This gives me an idea for a new business & I am going to offer franchise opportunities to to GIM members.
Glockngold's house paint rental is gearing up.
Lifetime cost per gallon should be about $150. per gallon.
and by the time our customers rental period is up, they'll be ready to be "serviced" again :cheerful:
 

Irons

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One thing: I go along with Joseph & Taezzar...........if you have a car you need to realize that things break and tires need to be replaced. You should keep money put away for this. And if you don't have a lot of cash coming in, look for places where you can cut back on the cash going out.
Save money? Plan ahead? Take responsibility for your own actions? Riiiight.

Only freaking anti obama racist weirdo's do things like that. N***a please. :rolleyes:
 

searcher

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Save money? Plan ahead? Take responsibility for your own actions? Riiiight.

Only freaking anti obama racist weirdo's do things like that. N***a please. :rolleyes:
:thumbs_up:................thanks button at the beach :beerglass:
 

andial

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#21
.....



Oh my.
 

TLM

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#22
Off of Craigslist, I bought a set of used tires mounted and balanced on steel rims for $100.
They only had about 10-20% wear on the tires, the steel rims needed a little cleaning and didn't look
all that great so I bought a set of new plastic wheel covers for an additional $35.
I'm sure I will be able to get 40-50,000 mile off of them.

I do however have some socks and underwear I would like to rent out, any takers?
 

DodgebyDave

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Read a story out of Indianapolis this morning about "electric vehicle sharing".

Bwah. From the french
 

GOLD DUCK

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Save money? Plan ahead? Take responsibility for your own actions? Riiiight.

Only freaking anti obama racist weirdo's do things like that. N***a please. :rolleyes:
You would think by now, Obama would be giving away free tires.

How about "Jump the fence into the US and get welfare, Section 8 housing voucher, cellphone, EBT card and a set of tires" :eek_ma:
 

Dude

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You would think by now, Obama would be giving away free tires.

How about "Jump the fence into the US and get welfare, Section 8 housing voucher, cellphone, EBT card and a set of tires" :eek_ma:
Shut your damn mouth. I'm sick of govy taking sarcastic comments like this only to write and pass a bill, then implement. :s1::afraid::realmad:;):p:mad::confused:
 

GOLD DUCK

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QWAK,I just had a great idea :idea: -- "RENT to OWN ROCKS":thumbs_up::23_28_100s:

People in cities have limited exposure to large decrative ROCKS :yes: -- they don't even know what they are missing :hmmmm2::stupido2: --- with some FREE advertising on FOX and other cable net works and a fiew home made U-TUBE clips the public or at least some of the public will then WANT a big ROCK of there own!:idea::thumbs_up:

I got lots of BIG ROCKS here at the DUCK POND :yes: and @ $19.95 each PLUS shiping and handeling :wink: people can get TWO big ROCKS just pay shiping and haneling on the second ROCK! :thumbs_up::cheerful:

The rocks are realy for FREE :yes: but no one here wants them :thumbs_down: but by charging for the rocks people will think :hmmmm2: they are the only one with out there own rocks:thumbs_down::cry_smile: OR that they can be the FIRST one ware they live to have there own IMPORTED ROCK!:idea::thumbs_up::551:

Credit card orders ONLY and 100% refund garanteed IF you don't like your ROCK just ship it back and the purchas price will be refunded.:idea::thumbs_up:

Thease ROCKS are nothing like the old PET ROCKS :452::thumbs_down: thease ROCKS are WILD ROCKS with sharp edges and much biger and heavier depending on size ordered!:ahhhhh::afraid:

Thease ROCKS are BIG and BAD:ahhhhh: and can be used as GUARD ROCKS:secruity: for people homes.:hahaha::alberteinstein:

Included with each order will be signs sutable for posting "CAUTION -- GUARD ROCK" and "Watch for FALLING ROCKS":thumbs_up::cheerful:

the DUCK :15_1_70v: