On a Friday afternoon in early March, Germaine Rasheed walked into a RIMCO store in Stone Mountain to pay off her four-month-old rental tires.
That’s right, tires.
The Atlanta nurse said she didn’t have the $500 it would have cost her to get four new tires for her 3-year-old Camry. And she has no credit cards. But she still needed to get to work.
So Rasheed went to the Atlanta-based wheel and tire chain and got two tires on a rent-to-own basis. She paid $41.17 a month for them, until her tax refund came in and she was able to pay the balance.
“I needed them right away,” she said. “If you’re on a budget, you can’t afford it. Tires are very expensive.”
RIMCO, a division of Atlanta rent-to-own furniture and electronics company Aaron’s, started in 2004 as a destination for drivers who wanted to pimp their rides with trendy wheels. But as the recession reduced customers’ demand for pricey rims, the company looked for other things it could sell that would keep shoppers coming back time and again.
The answer seemed obvious: tires.
“We might not have made the change” if not for the recession, said Ken Butler, Aaron’s chief operating officer. “When people have got money to spend, they’re going to spend it on wheels, on clothes, on things that make them feel better. It forced us to make that change.”
RIMCO still sells and rents rims. But two years ago, they made up 60 to 70 percent of the business. Now, the company sells and leases twice as many tires as wheels.
Rent-N-Roll, a competitor with one Atlanta store, has also seen growth in its tire business, vice president of franchising Vince Ficarrotta said.
Tire prices have risen dramatically in recent years, he said, due in part to higher tariffs. That means people who need new tires may be less able to afford them outright — and more likely to rent to own.
“You might find sticker shock if you went to buy brand-new tires,” Ficarrotta said. “People who might never have considered a rent-to-own television set would rent to own wheels and tires.”
Renting to own should be a last resort, said John McCosh, a spokesman for consumer counseling nonprofit CredAbility. He recalled buying used tires as a poor college student.
“The problem with renting anything is you’re going to pay a huge premium,” he said.
Rasheed said buying the two tires new from RIMCO would have cost her $308.99 plus tax; to pay for them over the course of a year would be $494.04 plus tax. With the addition of a fee for hazard assistance, Rasheed said, she spent close to $600 for the tires when she paid them off.
Butler said RIMCO’s shift away from rims to tires means the company is providing customers with something they need, not something they want. He likened it to Aaron’s exit from the jewelry business, which he said showed the chain “is not a bling-bling store.”
Even the signs at RIMCO’s 16 company stores have changed to emphasize tire sales.
Nationwide, people are reconsidering what they think of as necessities. When the economy was booming, the list of things people thought they needed expanded, said Paul Taylor, the director of the Pew Research Center’s social and demographics trend project. But attitudes toward consumption shift during difficult economic times.
Taylor said as people stopped feeling rich when the housing bubble burst, their definition of what they needed changed. Sid Jones, vice president of investor relations at Atlanta-based Genuine Parts Co., said fewer people were spending money on things like waxes for their cars.
Across the board, consumer spending on luxuries — like rims — decreased, said Jeffrey Humphreys, director of economic forecasting at the University of Georgia. Shoppers’ priorities shifted.
Even people who do have credit are using RIMCO to buy tires, Butler said. Because the cost of paying off tires over the long term is roughly similar to a credit card’s rates, many shoppers want to save their credit cards for emergencies they cannot finance any other way.
“They like to have a little bit of a buffer,” he said.
Gene Woodard has been a RIMCO customer for some time. The 53-year-old Snellville resident said he had been spending $150 a month on tires and wheels at the store. But he is going through a divorce, and has bills to pay. Woodard, who said he has no savings, decided late last year to return his rims. The money could be better spent, he said. Now, he is just renting tires, for $45 monthly.
“The cost of fuel, the cost of food, everything just went up, everything,” the disabled veteran said. “More money for me in a bank account will allow me to do other things.”
But Woodard — who likened buying rims for his 2001 Pontiac Bonneville to the feeling one gets when putting on a new suit — hasn’t given up on putting rims back on his car. He said he hopes to save enough money to buy them, though. He doesn’t plan to rent anything other than tires from RIMCO, saying he intends to do more critical thinking when it comes to his spending.
“I’d rather pay for it all at once,” he said. “I’d rather have my money working for me than working for someone else.”
RIMCO, which had shrunk from 38 stores at its peak in 2008 — “We grew it too fast and didn’t really know what we were getting into,” Butler said — is beginning to expand again, with two new stores set to open in Texas. RIMCO added five company stores last year; there are two RIMCO stores in metro Atlanta.
Butler said he is still tweaking the model, trying to determine how many tires to have on hand, and what other items might fit well with the business’ new focus. He thinks even as the economy improves, there will be a market for the rent-to-own tires RIMCO offers.
“The sustainable part, the legitimate business, is the tires,” Butler said.
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