Price cap for rent-to-own sector - MSE News

Former_MSE_Naomi

Vulnerable customers who use rent-to-own firms will not pay more in interest than the cost of the original item from April, as part of new rules announced by the financial regulator today...

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'Price cap for rent-to-own sector'

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Clive_Woody

No doubt this will see a decline in TV/washing machine sales as these companies become more selective who they sell to, to try and avoid the non/late payers who eat into their profits.

This is great in theory but I suspect it could well drive these companies out of business which will then restrict where many people, on a limited budget, can buy new tech/white goods. Very much like cracking down on the pay day loans, morally the right thing to do, but not really offering an alternative for those who depended on them (no I'm not suggesting people depended on having a new TV every couple of years).

glider3560

All they'll do is bump up the original item price to cover the lost interest.

Takmon

glider3560 wrote: »

All they'll do is bump up the original item price to cover the lost interest.

That shouldn't be possible...

MSE_Article wrote:

Under the new rules, the FCA will also require firms to benchmark their prices, including delivery and installation but excluding any add-ons such as warranties, against three mainstream retailers.

SnowTiger

glider3560 wrote: »

All they'll do is bump up the original item price to cover the lost interest.

Takmon wrote: »

That shouldn't be possible...

Originally Posted by MSE Article
Under the new rules, the FCA will also require firms to benchmark their prices, including delivery and installation but excluding any add-ons such as warranties, against three mainstream retailers.

Doesn't that mean they'll have to compare their prices with other retailers, rather than not being able to charge more than, say, Argos would for the same product?

System

I've seen the prices quoted on the BBC article for what they'll be with the cap and you're still paying MUUUUCH more than you could if you walked into Currys and bought outright. An Indesit 60cm Fridge Freezer you can buy from Currys today for £240-£400 will be £1362 under the cap.

grumbler

I wonder what sort of TVs and washing machines these 'vulnerable' customers rent-to-buy...


Is it 24" TVs under £100 and basic washing machines under £200?

System

They're not top end, in fact they're not even middle standard stuff. Cheap Acer laptops, budget brand TVs. The fact the fridge freezer is Indesit gives you an idea of the quality of stuff they're selling on tick.

grumbler

Well, I asked only because I remember what appliances in BrightHouse in my town were aimed, I guess, at the same 'vulnerable' customers.


Now I checked randomly rent2buytv.co.uk and yes, I see some basic stuff there, but I also see Panasonic TX49FX700 4K for £600 (other retailers).

grumbler

Is it time to cap the cost of mortgages then?
For a 25-year fixed-rate mortgage it's 6.4%.

I know, you can get it cheaper now, but FCA is supposed to be consistent and proactive.