Rent-to-own News

Rent-to-own News - In Economic Meltdown, analysts bank on RAC and Aarons

October 27, 2008

APRO Public Affairs Director Richard May is used to fielding calls from financial analysts curious about the viability of the rent-to-own industry.

However, the combined dynamics of the subprime mortgage crisis, credit crunch and Wall Street's roller coaster ride over the last month have driven such calls from "10 to 20 per month to 10 to 20 per week," May says.

For the first time Monday, May hosted a conference call with around a dozen senior financial analysts who peppered him with questions regarding the industry's performance in the current economic climate, regulatory concerns, the upcoming elections and rates of skips and collections.

"The economic meltdown has created much more activity due to new interest in the rent-to-own industry and the service it provides that is credit free," May says. "That's why the annual statistical survey is so important because it helps us build the financial story which analysts use to better rate RAC and Aaron's. The more RAC and Aaron's are valued, the more your company is valued."

The 45 minute conference call -- organized in a two day time frame by Arvind Bhatia, Sr. Vice President of Dallas based investment firm Sterne Agee & Leach, Inc. -- allowed analysts to get a better grasp of the industry in order to make buying recommendations to investment firms and brokerage houses.

May described industry trends and pricing structure changes over the last five years -- such as 90-days same as cash and 12-to-own -- are helping to expand the traditional RTO customer base.

"That has definitely attracted that more financially stable monthly customer," Mays says. "In the past, our demographic has been narrowly defined. What we're seeing today is dealers really reaching out to new customers through innovative pricing and marketing."

As consumer credit remains scarce, customers as well as investors are giving rent-to-own a second look as an alternative financing mechanism for acquiring products May says.

"And that's exactly what we want," he says. "Now that the price of gas is back down, the dynamics of this economy are definitely in our favor."

 

mevans@rtohq.org

About APRO
The Association of Progressive Rental Organizations is the official voice of the rent-to-own industry and the most accurate and trustworthy source of rent-to-own news in the industry. Founded in 1980, APRO is the national, nonprofit trade association advocating and representing the rent-to-own industry before the U.S. Congress, state legislatures, courts, media and the public.

For more information, visit www.rtohq.org.




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Complete issue of RTOHQ: The Magazine | April-May 2009
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Association of Progressive Rental Organizations
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