Klarinet Archive - Posting 000637.txt from 1998/09

From: "Karl Krelove" <kkrelove@-----.com>
Subj: Re: [kl] Buying Clarinets on Time
Date: Thu, 17 Sep 1998 22:41:36 -0400

-----Original Message-----
From: Kevin Fay (LCA) <kevinfay@-----.com>
Date: Thursday, September 17, 1998 8:26 PM
Subject: RE: [kl] Buying Clarinets on Time

>Karl Krelove wrote:
>
><snip>
>
>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.
>
><endsnip>
>
>For furniture, it truly was a method to bilk poor people out of their
money.
>People don't often want to take their couch back after a 3-month trial
>period. Rent-to-own is a great way to get instruments into the hands of
>kids, though, many/most of whom will play no more than a year. With the
>two-pool method, the rental instruments can take a real beating--and the
>parent loses a credit towards the purchase.<snip>
>

Well, actually, the stores are still permitted to offer a credit toward the
purchase based on the rental paid in. One difference, though, is that the
credit is capped at some dollar amount that is typically not a full purchase
price of a new instrument, so the parent always has an out of pocket cost.
Another side-effect, though, is that the supply of used instruments for sale
has been drastically reduced. The stores used to sell their rental
instruments that had been returned at prices that were based on how many
times the instrument had been rented and what kind of cosmetic condition it
was in. Now those instruments stay in the rental pool until they can't be
kept in repair. I don't know what happens to them then, but they don't seem
to be offered for sale. Of course, it isn't to say that some creative
bookkeeping can't now and then somehow manage to transfer a rental
instrument out of the pool so it can be sold, but I don't think the stores
can do too much of that without a legal risk.

Karl Krelove

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