I winced when I wrote the check for those tires the other day — the wrong side of $700, it was — but I take comfort in the fact that I could have done a whole lot worse:
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.
And, just like those other operations, they work on massive margins:
[A] 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.
Still, if you have to scrape to get $14 a week, and there have been times when I have had to, what else can you do? Used tires? Bus passes?
(Via Outside the Beltway.)