The story is one you’ve heard many times before and which, if you are an animal lover, begins with an objection. A woman, whose dog had gone to its final reward, decided to go to the local pet store (bad decision there because they buy from the hated “puppy mills”) to select a new puppy to cheer up her son.
Initially, the choice was to be a Boston Bull Terrier, but somehow she feel in love with another breed and finally walked out with a Labradoodle. These are magnificent animals I must say since I met one on a beach in Florida and I immediately fell in love. But I, forgive me here, wouldn’t have gone to a pet store for ANY animal. Sorry, but I don’t trust them.
The puppy she selected, however, was a bit over her budget of $1,400 and ended up being over $2K, so she agreed to a finance agreement that had $165.06 a month payments. When she and her husband were perusing their credit reports, they were shocked to see a charge of $5,800. What could it have been for, they wondered with their mouth, I’m guess, dropping wide open at that point.
Calling the pet shop and the credit card company, they were told it wasn’t an agreement to pay off the bill for the puppy but a lease agreement for the dog. Lease agreement for a dog? Bloomberg spilled the beans with their “I’m Renting a Dog?” article. Yes, she was leasing a dog and if she missed a payment, they’d take back the dog. Of course, if the dog met an unfortunate end, she’d still be on the hook for something like a charge because she wouldn’t be paying the full amount of the dog.
How did such a business transaction come into existence? Think about that wonderful, almost disastrous subprime market for homes. Remember the robo signing of mortgages to people who couldn’t possibly afford the homes they were buying? Well, it’s entered into the world of super expensive pets that people can’t afford, either, and that’s why these leasing arrangements were devised.
But is it the leasing company or the buyer who is to blame? Didn’t they read the fine print in the contract? Do you ever sit there, as they wait pen-in-hand for you to sign, so you can read all of the agreement in full and then ask for an actual copy with your signature? I will bet you don’t and you assume that it’s the regular old finance agreement. You’d be making a major mistake if you do or did. The game has changed significantly and you are the target they seek. Ah, you trusting consumer, you.
What’s the finance charge on these leasing arrangements? The Bloomberg article indicates it’s somewhere around 70% so you will end up paying double for that pet you couldn’t afford in the first place.
Consider how leasing can get really out of hand. Suppose you want dental implants (and lots of people do), is the finance agreement going to have some hidden wording that indicates they can take those teeth back or place a lien on your property for the money you owe? Your furniture, car, clothes (why not lease clothes?), and just about everything else you may want will be offered on a lease instead of outright purchase.
Forget furniture, cell phones, computers and TV sets. You know you can already get those on lease agreements. Companies started leasing computers 40 years ago. They so quickly upgrade them that it doesn’t pay to purchase them anymore.
The money people are out to get you and you have to stop being so trusting and remember that money in your hand is better than mortgaging your future all because you were trusting. Not a very nice world when you can’t trust, is it? But that’s the one we live in now, so get used to it and get ready to read.