Klarinet Archive - Posting 000633.txt from 1998/09

From: "Karl Krelove" <kkrelove@-----.com>
Subj: Re: [kl] Buying Clarinets on Time
Date: Thu, 17 Sep 1998 22:41:32 -0400

-----Original Message-----
From: Kevin Fay (LCA) <kevinfay@-----.com>
Date: Thursday, September 17, 1998 11:51 AM
Subject: [kl] Buying Clarinets on Time

>Rent to own is a great plan for a beginner who may or may not buy the
>instrument. For artist level instruments--where the purchaser KNOWS that
>they will buy and keep the horn--it's not so good from an economic
>perspective. The typical plan calls for the buyer to pay the full retail
>price, which if recast as street price + interest @-----.
>Economically, you're not renting the horn, you're renting the store's money
>to buy the horn--and the store will charge a much higher rate of interest
>than a bank.
>

For what it's worth to anyone, rent-to-own programs have for several years
been illegal in Pennsylvania, precisely because of the interest equivalence.
A number of years ago Pennsylvania's attorney general went after a couple of
music stores over this and forced settlements that essentially ended
rent-to-own programs - I think he originally started out after furniture
stores, many of which sold their wares in a similar way. The music stores
must now keep a separate pool of rental instruments which are not offered
for sale. When the student decides to purchase an instrument (at any point
in the contract), he is sold a different instrument - usually a new one
unless he wants to apply his purchase credit toward a used instrument. In
any case, even the used instruments are not supposed to come from the same
pool of instruments as the rentals.

Karl Krelove

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