Make us your home page
Instagram

Tread carefully when renting your wheels

When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn't afford to buy a new set.

So they decided to rent instead.

The Rich Square, N.C., 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 $982.80, almost triple what the radials would have cost at Walmart.

"I know you have to pay a lot more this way," said Florence Cherry, 57, a nurse who drives the 15-year-old van when her husband isn't using it to get to his job as a prison guard. "But we didn't really have a choice."

Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.

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. But that access doesn't come cheap.

Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can't make them go away.

Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.

It's also a booming business for specialized tire and wheel dealers that have become beneficiaries of a struggling U.S. economy. Fast-expanding chains with names like Rent-a-Wheel and EZ Rims 4 Rent that got their start selling high-end rims to car enthusiasts have discovered a lucrative market selling tires on time.

"We see tremendous opportunity serving people who are just looking for dependable tires to get to work," said Larry Sutton, founder and president of Rent-N-Roll. The Tampa chain has 66 locations nationwide and plans to open six more this year.

Sutton registered the trademark RNR Tire Express last fall and has been rebranding many stores to focus on tires instead of the oversized chrome rims that were the chain's mainstay. Today, Sutton said, tires make up two-thirds of RNR's sales, up from less than half several years ago.

A host of economic factors are pushing the growth of tire rentals.

Soaring costs for natural rubber and petroleum used to manufacture tires have pushed up prices. The average price of a passenger tire in the United States increased 57 percent in 2012 from 2006, according to data from trade publication Modern Tire Dealer. The prices on some popular sizes have more than doubled.

Consumers, meanwhile, have an increasingly difficult time affording big-ticket purchases.

Since 2009, median household income has fallen more than 5 percent. And in the wake of the recession, the number of households in the country with credit histories too damaged to qualify for most credit cards has risen.

Tires account for just a tiny slice of the $8.5 billion rent-to-own market. But they stand out because — unlike with a dinette set — giving back tires means not being able to drive to work.

"Tires are a necessity," said Jim Hawkins, a University of Houston law professor who studies the alternative finance industry. "These customers are vulnerable because they have no choice."

The first rent-to-own tire and wheel dealers appeared in the 1990s, targeting young urban males. Chains enlisted rappers to hawk shiny customized rims and low-profile tires. But after the economy crashed, dealers saw an influx of customers asking for standard passenger tires. Many were older and a surprising number were women, a group the industry had all but ignored.

Tread carefully when renting your wheels 06/27/13 [Last modified: Wednesday, June 26, 2013 6:49pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Report slams Pinellas construction licensing agency and leaders

    Local Government

    LARGO — The Pinellas County Construction Licensing Board mismanaged its finances, lacked accountability and disregarded its own rules, according to a scathing report released Wednesday by the county's inspector general.

    Rodney Fischer, the executive director of the Pinellas County Construction Licensing Board, resigned in January.  [SCOTT KEELER   |   Times]
  2. A meatless burger that tastes like meat? Ciccio Restaurants will serve the Impossible Burger.

    Food & Dining

    TAMPA — The most red-hot hamburger in the nation right now contains no meat.

    Ciccio executive chef Luis Flores prepares an Impossible Burger Wednesday at the Epicurean Hotel Food Theatre in Tampa.
  3. Construction starts on USF medical school, the first piece of Tampa's Water Street project

    Health

    TAMPA — Dozens of workers in hard hats and boots were busy at work at the corner of South Meridian Avenue and Channelside Drive Wednesday morning, signaling the start of construction on the University of South Florida's new Morsani College of Medicine and Heart Institute.

    Construction is underway for the new Morsani College of Medicine and USF Health Heart Institute in downtown Tampa. This view is from atop Amalie Arena, where local officials gathered Wednesday to celebrate the first piece of what will be the new Water Street District. The USF building is expected to open in late 2019. [ALESSANDRA DA PRA  |   Times]
  4. Tampa Bay among top 25 metro areas with fastest growing economies

    Economic Development

    Tampa Bay had the 24th fastest growing economy among 382 metro areas in the country for 2016. According to an analysis by the U.S. Bureau of Economic Analysis, Tampa Bay's gross domestic product, or GDP, increased 4.2 percent from 2015 to 2016 to hit $126.2 billion.

    Tampa Bay had the 24th fastest growing economy in the country for 2016. Rentals were one of the areas that contributed to Tampa Bay's GDP growth. Pictured is attorney David Eaton in front of his rental home. 
[SCOTT KEELER | Times]
  5. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]