BBB: Read the fine print on pet financing

- You can lease a car, an apartment, and even furniture, but how about a pet?

The new trend in becoming a pet parent is leasing to buy, but the Better Business Bureau warns that consumers need to be aware of what’s in the agreement before taking home their pet.

One company used by around 350 pet retail stores and breeders in 40 states explains its lease-to-own a pet program on its website.

Customers make monthly payments on the pet – referred to as a “product” or “item” on the company’s website. But the customer does not own the pet. The customer has the option to buy the pet through the company’s “Early Buyout option” or they can make a final payment at the end of the lease “equal to the fair market value of the pet.”

A couple featured in a story by Bloomberg’s Patrick Clark about the company bought a golden retriever puppy for $2,400. They chose a 34-month payment plan and agreed to pay $165.06 per month.  But the math of the transaction didn’t sink in until they checked their credit report and saw a credit approval for $5,800 – which is the total cost of the dog after finance charges.

They called the company through which they financed their dog and were told, even after the 34 months of payments, they wouldn’t own the dog until making the fair market value payment, which was described in the article as “two months’ rent.”

The Better Business Bureau says companies like this don’t have to follow the same regulations imposed on traditional lenders like banks and credit card companies. So they can charge high interest rates – sometimes between 36 and 170 percent.

And if you fail to make those payments, the company can repossess your pet. Also, if the pet becomes ill and dies, or if it runs away, or even if it has to be re-homed, the company will still ask the lessee to make the payments until the end of the lease.

So, as with any contract, read the fine print and know the terms of any financial documents you sign, or it could mean you’re out the money and your new furry friend.

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