The Economics Of Renting Versus Credit on TV's

[Richard_FM]

I was wondering if anyone had made an in depth study of the economics of renting a television against paying on credit.

Hire Purchase seemed to have started around the time the TV market did, but I understand it needed a large deposit to take out an agreement.

Also the cost of repairs would need to be taken into account.

The amount of VAT charged on TVs meant that renting had a spike in the 1970s as purchase prices suddenly went up.

When shops like Comet & Currys started to offer credit on new televisions in the 1980s, along with sets being more reliable seemed to swing the economics towards buying on credit.

During the 1970s the second set market began to grow, with portable B&W TVs more likely to be bought outright rather than hired. Certainly looking at price lists online there was a big gap in prices between such a set & one that would typically be a main colour television for a household.

I did wonder if this meant a smaller market for mid-sized televisions, certainly not as many, either B&W or colour seem to have survived to be collected.

[Herald1360]

Not in depth particularly, but I rented our first colour TV for a few years in the early '80s but by 1985, the economics of a credit sale set with 5-year extended warranty were more attractive than renting. The set duly lasted another five years after it was mine until it was passed on in the family. By then, buying was a no brainer!

[MrBungle]

Certainly buying one now is better value. They cost nothing now. Not even worth repairing most of the time unless it’s easy (my 32” Samsung cost me 99p + an electrolytic cap )

My parents bought their colour television in the mid 1970s outright. This was after they rented before that and had nothing but problems with radio rentals I think it was. Various sets they had broke very quickly and the service was terrible. The grundig set they bought lasted until about 2001 in the spare room. It was my computer monitor for a few years

When ubiquitous credit came around it was arguably better than renting.

[winston_1]

Originally Posted by Richard_FM

The amount of VAT charged on TVs meant that renting had a spike in the 1970s as purchase prices suddenly went up.

Surely VAT was on rentals as well?

[G8UWM-MildMartin]

I'd add that when the Ferguson TX10 chassis came out, outright purchase of the cheapest 22" model was more attractive than rental for my parents, partly because of the lower power consumption of around 65W versus 180W of the unreliable rented set, but mainly because Ferguson, through the SERT, invited members of the Chester & district amateur radio society to a presentation on the chassis and gave away service manuals to anyone attending, and I could see the simplification and elegance of its design.
(It needed one focus unit in its 12 years' service as our main set and a regunned tube when passed on to me.)

[Nuvistor]

Hire Purchase has been around a lot longer than the TV market, may have had a different name but effectively the same, buy the item in weekly/monthly payments with a large interest rate.

VAT made no difference to renting or buying, that would have upset the tax man. Large deposits were required for both HP and renting, 10 months rent seemed to be a number I remember but many were persuaded to pay 12 months and get a discount.

Second hand renting of TV sets became popular, not sure how old they had to be be but required one months deposit.

Buying or renting, we sold a lot of the 18-20 inch Hitachi and Toshiba TV, some cash others on HP, both were that reliable that repairs were not a major item.

The big marketing message for renting new TV’s was no repairs to pay for and you could change your TV every 12 months, for second hand TV’s they only required a months payment upnfront.

Is there a rental market for TV’s now?

[FERNSEH]

Quote Nuvistor:
"Is there a rental market for TV’s now?"

The Forbes is still offering TVs for rental although it seems the emphasis is on domestic appliances.

http://www.forbes-rentals.co.uk/


"Second hand renting of TV sets became popular, not sure how old they had to be but required one months deposit"

Sets had to be over three years old to qualify for rental without having to accept a large advance payment.
Big firms such as Rediffusion and British Relay did the job properly and the reissued the older sets which were fitted out with new cabinets and extensive modifications to the electronics so in fact the customer received a set which was as good as new.
The fact is the rental companies probably didn't make much money from reconditioning the older sets but at least it kept the business going.

DFWB.

[HamishBoxer]

Yes I remember as you state so much stuff rented was second hand because of the dreaded big deposit.

[simpsons]

My understanding was that renting for the independent TV shop was a cash cow.

It not only offered the customer an opportunity to have a decent set at an affordable price which included servicing, a further expense, the retailer was paid upfront at full price and also continued to receive rent after the rental contract had expired.

It could be argued that the increased footfall as renters returned to pay the rent was a possible opportunity for increased sales. Unfortunately, where I worked in a small village called Norton, near Letchworth, the customers were not well heeled, and so whilst batteries and torch bulbs were a regular sale, not too many radiograms or for that matter radios flew off the shelves.

Christmas was another matter whereby sales of torches and shavers, no doubt bought at the last moment, fully justified their display in the shop window.

Chris

[Peter.N.]

In the '70s and 80s rentals were my main source of income, I had about 150 out at the time and we could live off those. These were ex rental sets mainly from Granada which were quite expensive when I started but rapidly reduced in price.

I used to sell secondhand sets as well but I would rather they were rented. As we progressed into the '90's most of the valve sets had gone and the much more reliable transistor sets came along, the increased reliability and rapidly falling prices virtually put an end to my rental business and considerably diminished the repair side as well, I still had a few out and some VCR's as well but by 2000 the business was no longer viable so we started doing B&B.

I was told as a kid that if I went into the TV trade I would have a job for life, well not quite but it nearly lasted until I retired in 2004.

Peter

Peter

[electronicskip]

I worked for Rumbelows from the late 70's till the 90's and our big cash cow was always to rent out older "decons" decontrolled 2nd hand sets as they had already paid for themselves , but after Thorn sold off the rental business to Radio Rentals, they introduced something called Option3 to Rumbelows which was basically renting/buying a set over a 3 year period with full servicing and a guarantee for 3 years and at the end of it you owned it.
Obviously it was a thinly disguised HP agreement but people jumped at it so we got back a lot of the rental business for a short while .
Eventually it was extended to white goods but never really took off in that area.

[FERNSEH]

Quote Simpsons: "My understanding was that renting for the independent TV shop was a cash cow."
That ain't necessarily so.
The independents were at a disadvantage because they paid far more for their TV sets compared with the big firms. Source your sets from wholesalers and your already at a disadvantage because the middleman has to make a profit.
And even buying sets direct wasn't that much cheaper. Back in 1972 I bought from Rank-Bush-Murphy a lot of Murphy V2023 and V2423 mono TVs for something like 58 pounds. Imagine my displeasure went I learnt that the same set was being offered in the discount stores for much less. The response from the RBM representative was: "ah but they buy a lot of sets from us" So it was out of the question trying to sell the V2023 and almost all were rented. It's doubtful if any money was made from renting those junk A774 chassis TVs and I was glad to see the last of things by 1980. Got pleasure from smashing them up.
Anyway, colour was the big thing for rental in the 70s but the writing was on the wall for TV rental by the end of the eighties. In 1988 the Ferguson ICC5 series was introduced and wasn't I the lucky one to buy a few hundred to rent out!

DFWB.

[Welsh Anorak]

There is still a small demand for rentals. I have a contract with Box Clever to look after their customers in my local area. Usually it's installation, tuning or exchange though of course I repair when necessary. It won't exactly make me rich though!
The customers are often elderly and have always rented and just want to have a reliable service. One or two want to keep up with the latest equipment, but that's rare. The sets are usually Vestels or Samsung bread-and-butter sets, though we do get the occasional CRT soldiering on - goodness knows how much money they've made from them!
We used to rent out a few sets in the Eighties, usually Doric Mk4s. We rented a large screen one to a local hospital who treated patients with severe mental disorders - no-one else would touch the contract. We bolted the set to a massive wooden TV stand with coach bolts and there it worked for many years, earning us quite a lot as we built insurance cover into the rent. Eventually an inmate took exception to a programme and threw the TV - stand and all - through the window. We declined to collect the remains...

[simpsons]

FERNSEH, "That ain't necessarily so". You forgot one thing. Christmas hampers!!

GEC television of Slough used to offer independant's a Christmas hamper should they purchase 4 off TV's at a time. For the master of the house, this offer was snapped up as his other half now had some reward for all the hours spent looking after the shop while he was enjoying cups of tea whilst mending "a young maiden's" TV.

Chris

[Dai Corner]

I remember helping a friend install her first purchased TV in 2008. Goodness knows how much she had paid in rent over the years.

[G6Tanuki]

There's some interesting discussions of rentals in "The Setmakers".

Remember that particularly back in the immediate post-WWII era to buy a TV would have needed an upfront spend of what amounted to a couple of months' salary for a typical worker, once 'Purchase Tax' was included [TVs were seen as luxury items so attracted higher PT].

If you're only earning a fiver a week, a near £100 TV was not likely to be high on your outright-purchase priorities!



See https://www.castlecover.co.uk/histor...tility-prices/

though I think their curve for TVs needs to be extended - most TVs now cost under £500.

Renting was much more-affordable for the average man-in-the-street; the amount of up-front payment you had to make when taking on a rental was a classic 'lever' used by governments - if the economy looks to be going a bit wild, push the up-front rental-payment up to a year; economy sluggish, or an election approaching - drop it to 3 months.

"Stop-go" was a big feature of the UK economy from the 1950s through the 60s. Some have argued that this - by leading to manufacturers having their warehouses stuffed-full of unsold TVs during a 'credit crunch' period - led to the downfall of some players in the UK TV industry.

There were various ways in which rental companies could use this to play the market - depending on whether the government-of-the-day allowed them to write-down 'depreciated' stocks of old models as a tax-loss or not. This in part explains the renting-out of secondhand/refurbished/long-in-the-tooth/out-of-fashion models which would otherwise have been deemed unsaleable by the retail trade.

Again, "the Setmakers" has narrative.

[FERNSEH]

FERNSEH, "That ain't necessarily so". You forgot one thing. Christmas hampers!!


Indeed I did. I remember back in the early seventies one Christmas receiving from GEC R&T the hamper for buying a certain number of TVs.

In it contained a ham which was prepared and placed on the table.
We went out the house for a while leaving our cross collie-Labrador to guard the house. When we returned the ham was gone. Goes without saying what happened to it.

DFWB.

[Studio263]

Originally Posted by Richard_FM

I did wonder if this meant a smaller market for mid-sized televisions, certainly not as many, either B&W or colour seem to have survived to be collected.

Really? There are piles of them here, and I suspect that I am not alone. The survival rate for sets seems amazingly high to me, I know just about every household had one but they were built down to a price for a finite life (in most cases anyway) and yet decades later there are still more than enough of any type, size and model to go round. Did any frustrated potential TV collector ever abandon the hobby due to the unavailability of stock? Space maybe, wife's patience almost certainly but the raw material is still abundant.

[G6Tanuki]

Really? There are piles of them here, and I suspect that I am not alone. The survival rate for sets seems amazingly high to me, I know just about every household had one but they were built down to a price for a finite life (in most cases anyway) and yet decades later there are still more than enough of any type, size and model to go round. Did any frustrated potential TV collector ever abandon the hobby due to the unavailability of stock? Space maybe, wife's patience almost certainly but the raw material is still abundant.

I suspect a lot of the smaller [17/19/21-inch] tellies pushed out of pride-of-place in the lounge/living-room then got a second-go at life either as bedroom-sets or - in the 1980s/90s - monitors for computers/video-games.

I can recall doing quite a few "put a TV point in the bedroom for me and I'll pay you a tenner" jobs as a student in the late-1970s. Good beer-money but I always refused to do this if there was only a 405-line antenna to split or the TV intended for bedroom-service was 405-lines-only.

[Personally the idea of wanting-to-watch-TV-in-bed always struck me as a display of lack-of-imagination]

[Richard_FM]

I was thinking a lot of medium sized sets would have been too big for a bedroom and if people didn't want another set downstairs after upgrading their main set would have sold them on if still working & not too outdated, and scrapped if not so.