Posted by David on January 17, 2002 at 16:11:08:
In Reply to: Re: Rent to Own Tuba? Or Not? posted by Rick Denney on January 17, 2002 at 12:02:47:
Rick, Selling an instrument the way you are really poses a very small risk.
Most music stores have found that if a person walks with an instrument, no matter how costly, there is virtually no way to get it back unless you can get the person to give it to you -yeah right! You can go to court and get a judgement. This allows you to place a lien on nothing but the instrument and to collect what is already yours. Some states let you put a lien on the persons property but not many, and that costs money as well. Now though, you have spent time and money and still have no real recourse to get the horn back.
Music stores rent instruments to students (their parents) all the time. Those instruments cost a fraction of what a tuba costs but the same problems arise. Get a credit history - they'll walk and never look back. Get a credit card on file - they'll cancel it or contest the charges. Get a judgement - it's not any good. Texas as an example, is a debtor state which means the laws favor the borrower and not the loaner, makes it very difficult to collect your money. Once a payment is made, let's say the first one, the state laws favor the person who made that first payment even if he/she never makes another one. In the eyes of the state, a "good faith" effort was made on the part of the borrower in purchasing the instrument or furniture or car or house or whatever.
The large music stores absorb the costs of lost rentals by charging full list price on the rentals and then count on the gullibility (reads as "stupidity" to many) of the parents to continue to "rent" well past the time the instrument would have been paid for. In the market I am in, this loss ratio exceeds 30% every year. One has to sell a bunch of stuff to make up that! The loss ratio includes one of the largest music chains in the country.
I referred to cars and such above. You might tell me that a car can be re-possessed. In Texas, at least, repossessing a car amounts to the wrecker driver stealing your car. He is then paid by the finance company for doing that. In reality, if you as the customer want to keep the car, all you have to do is pay a minimal amount each month or every other month or just whenever you feel like it or when you have the money. (Be aware that wrecker drivers delight in "stealing" these cars. It's a challenge and pays the bills.)
The bottom line for anyone asked to do a rent-to-own on a personal instrument is to know and trust the party you sell to. If that's not the case, I would stay very far away.