Personal Income Tax

Home Appliances: Should You Rent or Buy?

Appliances: Should I rent or buy?

If you are lucky, you have a friend who is always honest with you, even when you don’t want to hear it.  That friend would tell you not to rent – ever - and they would be right. Renting an appliance may sound attractive in the short term, but long-term, you would be making a big hole in your own pocket. ASIC has released a calculator for people who need to see the numbers for themselves. The calculator will compute the long-term costs of renting if you input the rental term and the cost.  The answer will likely shock you.

Rent-to-buy vs consumer lease: Are they the same?

Your honest friend will also dispel any delusions you may have of owning the merchandise after the rental term. Consumer lease and rent to own/ buy options are not the same thing, although you invariably end up with nothing to show for your money in both cases. With a  consumer lease, you receive the merchandise at the beginning of the contract and at the end of the term you are compelled to return it in good order, unless you:

  • Offer to purchase the goods for an additional amount of money, however there is no guarantee the owner will agree.
  • Sign a new lease agreement for a newer model which will likely be at a higher rate than the old mode you are returning.

Your annoyingly honest friend would also point out that the above options would be in spite of having paid more than what it would have cost if you had purchased it outright in the first place. Furthermore, you should be aware that additional fees and charges may be incurred with a consumer lease for cleaning or penalties for late payments.

Low-income Earners Really Pay the Price

A report by ASIC revealed that many low-income earners were paying high prices over 12- and especially over 48-month leases. The research using data collected by RMIT and Centrelink underlined the fact that more than five times the retail amount of the goods is charged in some cases.  The worst of it is that an interest rate equal to 248% is not uncommon!

CHOICE campaigns manager Erin Turner, says CHOICE views these exorbitant costs as being outside of normal business operating expenses and profits.  The practice exploits people on low incomes, especially people on welfare payments through Centrepay.”

If you are considering the rental alternative to buying, you might find the following examples useful: -

Rent vs Buy Costs




36 months





Television 42"


48 months





Washer 7.0kg FL


48 months





Fridge 330L


48 months






These prices were sourced from Mr Rental and compared with the average retail price for a similar sized/ specification appliance.

Are you shocked to discover that you would be paying 80% more over and above the original price?

There may be times when you need to purchase a new appliance when you simply do not have money available.  Other viable options you could consider include:

  • Personal loans
  • Lay by
  • No (or low) interest loans
  • Low-interest credit cards
  • Online trading sites such as Freecycle where you can be connected with people giving consumer items away for free.

Don’t be afraid to ask questions and do your homework so that you can make an informed choice, and your honest friend won’t need to say: “I told you so!” 


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