Association of Professional Rental Organizations (APRO)
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Rent-to-Own 101

New to rent-to-own? Explore the basics to understand how it works and why it matters to millions of Americans.

Rental-Purchase Agreements Explained

Last Updated on April 29, 2026

A Rental-Purchase Agreement is the written contract used in a rent-to-own (also known as Lease-to-Own) transaction that outlines the payment schedule, the optional pathways to ownership, early purchase options, and customer rights and responsibilities, without creating traditional credit debt or long-term obligation.

What Is a Rental-Purchase Agreement? #

A Rental-Purchase Agreement is the legal framework that governs how a rent-to-own transaction works.

It defines:

  • How payments are made
  • What the customer is entitled to
  • What options are available over time
  • How ownership can be achieved

Unlike a traditional loan agreement, a Rental-Purchase Agreement is structured around use with flexibility, not a fixed repayment obligation.

What a Rental-Purchase Agreement Includes #

While specific terms vary by provider and state, most rental-purchase agreements include:

  • The payment schedule (weekly, biweekly, or monthly)
  • The total number of payments required for ownership
  • Available early purchase options
  • Same-as-Cash terms, if offered
  • The customer’s right to return the product
  • Reinstatement rights, where applicable
  • Service and maintenance provisions

These elements are designed to clearly explain both the structure of the agreement and the choices available to the customer.

Customer Rights Under the Agreement #

Rental-purchase agreements are designed to provide customers with flexibility and transparency.

Key rights typically include:

  • The ability to return the product and stop payments
  • The ability to reinstate the agreement under certain conditions
  • The option to obtain ownership through completion or early purchase
  • Clear disclosure of payment terms and total cost

These rights are a central part of how rent-to-own differs from traditional credit-based transactions.

Ownership Is Optional #

A defining feature of a Rental-Purchase Agreement is that ownership is not required.

Customers may choose to:

Ownership only occurs if the customer decides to complete one of the available pathways.

How This Differs from a Loan Agreement #

A Rental-Purchase Agreement is not a loan agreement.

In a traditional loan:

  • The borrower incurs debt
  • Interest is charged over time
  • Repayment is required regardless of changing circumstances

In a Rental-Purchase Agreement:

  • There is no interest
  • There is no debt
  • There is no long-term repayment obligation
  • The customer can choose whether to continue or return

This distinction is fundamental to understanding the rent-to-own model.

Regulation and Disclosure #

Rental-purchase agreements are regulated under state laws that require clear and transparent disclosures.

These regulations typically require:

  • Clear presentation of payment terms
  • Disclosure of total cost and ownership options
  • Explanation of customer rights

This helps ensure that customers understand how the agreement works before entering into it.

Why Rental-Purchase Agreements Matter #

Understanding the Rental-Purchase Agreement helps clarify what rent-to-own is and how it operates.

It shows that the transaction is:

  • Structured
  • Transparent
  • Flexible
  • Centered on customer choice

Rather than being a single fixed obligation, the agreement provides a framework that customers can navigate based on their needs.

Frequently Asked Questions #

What is a Rental-Purchase Agreement? #

It is the contract that defines how a rent-to-own transaction works, including payment terms, customer rights, and ownership options.

Is a Rental-Purchase Agreement a loan? #

No. It is not a loan and does not create traditional debt or interest-based obligations.

Do I have to complete all rent-to-own renewal payments? #

No. Customers can return the product and stop payments according to the terms of the agreement.

How do I become the owner? #

Ownership can be achieved by completing the agreement or using an Early Purchase Option, such as Same-as-Cash if available.

Related Topics #

To explore the rent-to-own model in greater detail, see these educational resources:

Table of contents

Mike Lewis

Central Properties dba Premier Rental-Purchase

Mike Lewis is a Premier Rental Purchase franchisee with multiple stores and currently serves as Vice President of Operations. With 33 years of experience in the rent-to-own industry, he has spent the past 20 years working closely with franchisee owners and previously spent 12 years in Corporate RTO, gaining a strong foundation in the business.

For the past five years, Mike has been sharing his knowledge by teaching managers and franchisees at the company’s Training Center.

Outside of work, he enjoys time with his family, kids, and grandkids, and appreciates the simple things in life – especially riding his Harley Davidson with the sun on his face. If you know, you know!

Lauren Talicska

Arona Corporation dba Arona Home Essentials

Lauren Talicska is an experienced multi-channel marketing specialist and the Vice President of Marketing & Communications at Arona Home Essentials. She has found her home in the RTO community, supporting stores in branding, growth, and increasing traffic.

You may recognize Lauren as a former RTO vendor, including her time as a partner for Nationwide RentDirect, or her previous participation in the APRO Vendor Advisory Committee. Lauren calls Columbus, Ohio, home and spends her workday crafting and executing marketing promotions from inception to realization, all while supporting the branding and social media needs of all the Arona stores in 12 states (plus Puerto Rico!).

Charles Smitherman

APRO

Charles Smitherman, JD, PhD, CAE, became CEO of APRO in 2023, bringing years of legal and executive experience in the rent-to-own industry. 

Prior to joining the association, Charles served as COO, General Counsel, and Vice President of PTS Financial Services, where he played an active role in the rent-to-own industry by representing his company through PTS’s club program offering with APRO member dealers. Charles is an attorney with two decades of experience across a wide variety of areas, including RTO, consumer financial services, antitrust, corporate law, mergers and acquisitions, litigation, franchise law, and privacy law. Following law school at the University of Georgia, Charles earned a Master of Legal Studies and PhD in Law from the University of Oxford in England.

Charles is credentialed as a Certified Association Executive (CAE) with the American Society of Association Executives, a Certified Franchise Executive (CFE) with the International Franchise Association, and a Certified Information Privacy Professional (CIPP/US) and Certified Information Privacy Manager (CIPM) through the International Association of Privacy Professionals. As APRO’s sixth CEO in its 45-year history, he brings a collaborative, member-focused approach to association leadership, emphasizing transparency, advocacy, and value creation. Outside of work, Charles is an active ultra runner and open water swimmer.

Mike Kays

Ashley Furniture Industries

As VP of Rental Sales for Ashley Furniture Industries, Mike thrives on building relationships with our RTO industry veterans, and helping businesses grow through new product, new marketing, and new supply chain options.

Mike works to leverage a wide breadth of relationships and influence, intimate knowledge of market trends, and unique knowledge of what RTO dealers need from a supplier to be successful.

The saying goes that a high tide raises all boats, and our goal is to leverage the world’s largest furniture manufacturer to drive the continued growth of the RTO industry and all the suppliers.

Mike Tissot

Countryside Rentals Inc., dba Rent-2-Own

Mike grew up in the rent-to-own industry under the guidance of his father, former APRO President and RTO legend Darrell Tissot. For nearly 25 years, Mike’s innovative leadership has helped expand the family business to more than 40 stores across Ohio and Kentucky while also shaping the industry as a whole.

He has served as President of the Ohio Rental Dealers Association, an APRO board member and Treasurer, and President and Treasurer of the TRIB Group. His contributions have earned him the APRO President’s Award of Excellence and the title of APRO Rental Dealer of the Year.

Outside of RTO, Mike enjoys time at the lake house or in Orange Beach, Alabama, with his girlfriend, Angela Strong McCool. A passionate Cincinnati Reds fan, he rarely misses a game, whether watching or listening alongside his parents. He also takes every opportunity to visit Arizona, where his daughter is currently attending Arizona State University.