By Patrick Avenell
JB Hi-Fi has launched a new electronics rental program called RentSmart. Products available for renting through the JB website include computers, tablets, smartphones, cameras, accessories and hi-fi equipment.
“Technology is constantly changing,” declares JB Hi-Fi. “So why buy new equipment when there are so many benefits of renting?
“Renting is the easy solution; you can take home what you want today, with the option to upgrade down the track. With RentSmart, getting the latest technology is easy and affordable.”
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Under the basic terms of RentSmart, customers can agree to 24-, 36- and 48-month contracts. Insurance for loss, damage and theft is included.
RentSmart will return 25 per cent of the cash payments back to the consumer if they upgrade every 24 months.
If a consumer were to purchase a $1,000 product on a 24-month contract, the RentSmart wizard on the JB Hi-Fi website estimates a cost of $18.27 per week.
Over 24 months, that comes to just over $1,900. With the 25 per cent upgrade rebate ($475), a rental consumer’s investment in the product, should they upgrade, will be $1,425.
The $425 rental margin as an annual interest rate, not taking into account compounding, is 21.25 per cent.
If a consumer chose not to upgrade, the effective annual interest rate would be 45 per cent.
The consumer electronics rental service was heavily criticised by Harvey Norman chairman Gerry Harvey in 2008. Despite offering rental services at the time, Harvey told Today Tonight that “the average family should turn down the deal”, according to newspaper reports at that time.