Data Point: 26% Won’t Buy Durable Goods at Retailers Without Lease-to-Own Option

From furniture to major appliances, durable goods are a necessity that many are finding hard to afford in an inflationary climate. With alternatives either limited or unappealing, more consumers seek lease-to-own (LTO) payments and the retailers offering this type of financing.

It’s a lucrative line of business for durable goods merchants, and financing often seals the deal.

A new study, The Lease-To-Own Secret: Giving Consumers Control Over Durable Goods They Need, a PYMNTS and Katapult collaboration, from a census-balanced survey of nearly 2,690 U.S. consumers, examines how lease-to-own plans are creating loyal customers.

• More than one-quarter of respondents would not transact at a traditional retailer that lacked lease-to-own options

With inflationary pressures at a 40-year high and the economy in a state of flux, more consumers want to finance, and many are choosing retailers offering these options.

Per the study, “More than one-quarter of respondents would not make a durable goods purchase at a traditional retailer that lacked lease-to-own options,” while 16% said they would not make the purchase, and 10% would seek a retailer offering lease-to-own financing.

• Two-thirds of respondents who have used lease-to-own would transact more durable goods this year if traditional retailers offered lease-to-own options

Former lease-to-own financing users like it and would make more durable goods purchases in-store with traditional retailers equipped with LTO financing.

Reasons that consumers want to find LTO offered at preferred traditional retailers vary, with 51% feeling traditional retailers have higher-quality products, 40% believing these retailers offer affordable financing options, and 42% saying their customer service superior.

• Almost one-third of respondents are at least somewhat interested in using a lease-to-own program, including roughly half of millennials and bridge millennials

As the portrait of those living paycheck to paycheck and in many cases struggling skews younger — and often with a six-figure income — LTO financing is understandably popular among these same demographic groups driving the buy now, pay later revolution.

Per the study, “age and income are two of the most significant determining factors influencing consumers’ use of alternative financing options for durable goods. Bridge millennials, millennials and Generation X consumers are the age groups most likely to finance all their purchases, with approximately 32% of respondents across these generations doing so.”

Get the study: The Lease-To-Own Secret: Giving Consumers Control Over Durable Goods They Need