Replacing a household appliance or high-tech device is never an easy task, especially for the wallet. To avoid having to pay several hundred or even thousands of euros all at once, the temptation is great to stagger the monthly payments.
Along with consumer credit, there is also an offer that appeals to consumers: long-term rental.
What does it consist of?
This type of contract offers to dispose of a property without buying it, for monthly rents over a fixed period. But beware of the confusion: a long-term rental (or LLD) necessarily requires returning the rented product at the end of the engagement, without any possibility of actually becoming the owner.
It is therefore different from leasing with option to purchase (LOA) - the famous leasing -, allows you to buy the property at the end of the contract, by simply paying the difference between its price and the monthly payments already paid. Likewise, while the LLD consists of a simple rental, the LOA is in reality a consumer credit which, as such, is subject to much stricter information and transparency obligations.
What are the advantages ?
These two types of rental have long been democratized in the automotive sector. Knowing that a car costs more and more over the miles, and that at the same time its resale price drops, the interest is to limit expenses by taking advantage of a new vehicle that we change every two or three years.
The success of this consumption model is such that it has spread to mass distribution. You can now rent a 4k television, a latest generation iPhone, a refrigerator or why not a bicycle over several years. The advanced advantages? Take advantage of new models that you can renew regularly to stay at the cutting edge of technology, with monthly payments accessible to all, since they generally reach between fifteen and thirty euros per month.
What are the disadvantages ?
The goal is to push you to overconsumption and over-equipment, by encouraging you to opt for ever more expensive high-tech models, even if it means creating a real habituation. Because to keep your rented products, you will have to renew your contracts again and again.
But the decisive question is whether the consumer wins financially. And the answer is a priori no. In early 2020, the UFC-Que Choisir published a study denouncing the lack of supervision of long-term rental, qualifying it as a "real economic pit". After having compared the cost of several household appliances and high-tech at the cash rate, with a credit and with the subscription of an LLD, the association realized that this last offer made skyrocket the real price of products. Especially since if you do not return the property in perfect condition at the end of the contract, you will be off for additional costs.
Economy
License: Accompanied driving, supervised driving, what are the differences?
Economy
Objects, car, house… Do I need to take out insurance for rental between individuals?
- Smartphone
- Budget
- Consumption
- Rental
- Computer
- Home appliance