Want a car, fridge or double bed? Why renting might be better than buying

Renting and sharing is getting bigger with the increasing use of online platforms. The key advantage is that you save on huge upfront payments and can use the product for as little as six months

Have a job that requires shifting? Or, are you starting your career and don't have enough to buy all the goodies to set up a house? Well, the answer is simple. Take them on rent. In fact, you can get anything from furniture to household appliances to automobiles, as renting has become quite popular. 

"Earlier, ownership was considered significant and a matter of social status, but with time, there has been a monumental shift in the thought process of people towards renting and leasing," says Geetansh Bamania, Co-founder, and CEO, Rentomojo. India is a huge economy with a growing number of earning millennials. Almost 65 per cent of India's population falls below the age of 35. The average young Indian white-collar worker changes his/her location every two or three years. This mobility factor, combined with limited income, provides a major boost to the renting model.

According to experts, the renting and sharing economy is getting bigger because of the easy availability of a wide range of products online and the increasing use of digital platforms. By renting and borrowing items, one can avoid making big upfront payment, though there is usually a refundable security deposit that one has to make. Currently, there are several players in the furniture and consumer appliances rental segment, such as Rentickle, Furlenco, GrabOnRent, and RentoMojo, that provide lifestyle products on a subscription-based model.

Other than leasing appliances and furniture, many of these companies also offer packages for an entire room like living, dining, and bedrooms, along with office or study rooms. The lease tenure is for a minimum of three months and can go up to 36 months. The pricing of these products is almost one-tenth of the original cost. Sameera, 29, recently relocated to Bangalore and got a double bed, two side tables, a sofa with cushions, a coffee table, an LED TV and a refrigerator. She pays a monthly rent of Rs 5,000. Buying those products would have cost her more than Rs 100,000. Further, she doesn’t even need to worry about relocation and maintenance as they are also taken care of by the company. Neerav Jain, Founder of Cityfurnish says, "Renting is a new and smarter way of living, which is becoming more predominant with reducing per capita saving and increasing overheads of purchasing and maintaining furniture and appliances." These leasing companies also give the option of relocating their products within the same city or to any other cities in which they operate. This saves the customers the trouble of re-selling and buying products while moving from one place to another. 

While leasing a product, one can also choose to customise the tenure for all items. The companies also decrease the monthly rental instalment if the length of the rental tenure is longer. The longer the tenure, the lower the price of the product. "When it comes to commodities, leasing is always a better option than owning, as their value will only depreciate with time. When a person chooses to lease appliances or furniture, the higher the lease period, the lesser they pay," adds Bamania. People renting goods from these places also have the option of owning them after a certain length of time. You can start with a monthly rental system and use the product for as long as you want, and later you can also own it by paying a lump sum at the end. A 1.5-ton air conditioner on rent costs Rs 1,400 per month, and can be owned after 36 months by paying another Rs 5,200. So the total cost to you is Rs 55,600 at the end of three years. Rentomojo provides the option to buy a product after leasing it for 12 months.

However, some people still avoid renting products from these companies, as they believe after paying rental monthly instalments (RMI), they have to return the product if they choose not to buy it. They feel it would be easier to buy a product on equated monthly instalments (EMI). Bamania of Rentomojo counters this mindset, saying, "When people buy products on EMIs, they don’t understand the hassles of relocation and with changing needs. Customers feel stuck with no option to return, or easily dispose." Under an RMI, the option of buying or returning a product vests with the customer. This isn't the case in an EMI, where one is stuck with the product as long as he/she doesn't find a buyer in the second-hand market.

Many consumers also face problems while registering on these platforms, as most have a long verification process. According to industry experts, people view the verification process as a tedious job. Many companies ask for KYC and personal identification. Along with documents like Aadhar and PAN, social media details are also asked in some cases. Due to this and the additional security deposit taken before renting a product, many people turn away from this sector. The security deposit is also not returned in case of major damage. However, Jain of Cityfurnish says that normal wear and tear caused due to usage does not entail a charge. The customer only stands to lose a part or all of his deposit if the product has been functionally damaged. 

Though furniture and appliances are the most commonly rented products in the market today, clothes have also been weaving their way into this segment and are gaining popularity. The trend is particularly catching on in high-value designer clothes that cost anything between Rs 25,000 to upwards of a few hundred thousand rupees. Renting of such occasional-wear instead of buying has also become quite popular as it provides value for money for customers. Clothes of popular designers such as Ritu Kumar, Manish Malhotra and Sabyasachi are easily available at a fraction of the original price. Companies like Flyrobe, Rentacloset, and Wrapd rent such clothes at prices ranging from as low as Rs 1,000 to Rs 50,000.