When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn't afford to buy a new set.
So they decided to rent instead.
The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.
"I know you have to pay a lot more this way," said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn't using it to get to his job as a prison guard. "But we didn't really have a choice."
Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.
Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation's economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can't get a loan anywhere else. But that access doesn't come cheap.
Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can't make them go away.
Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.
It's also a booming business for specialized tire and wheel dealers that have become beneficiaries of a struggling U.S. economy. Fast-expanding chains with names like Rent-a-Wheel and EZ Rims 4 Rent that got their start selling high-end rims to car enthusiasts have discovered a lucrative market selling tires on time.
"We see tremendous opportunity serving people who are just looking for dependable tires to get to work," said Larry Sutton, founder and president of Rent-N-Roll. The Tampa, Fla., chain has 66 locations nationwide, including two in California, and plans to open six more this year.
Sutton registered the trademark RNR Tire Express last fall and has been rebranding many stores to focus on tires instead of the oversized chrome rims that were the chain's mainstay. Today, Sutton said, tires make up two-thirds of RNR's sales, up from less than half several years ago.
A host of economic factors are pushing the growth of tire rentals.
Soaring costs for natural rubber and petroleum used to manufacture tires have pushed up prices. The average price of a passenger tire in the U.S. increased 57% in 2012 from 2006, according to data from trade publication Modern Tire Dealer. The prices on some popular sizes have more than doubled.
Consumers, meanwhile, have an increasingly difficult time affording big-ticket purchases.
Since 2009, median household income has fallen more than 5%. And in the wake of the recession, the number of households in the country with credit histories too damaged to qualify for most credit cards has risen to 35% from 27% five years ago.
With more people shut out of traditional financing, the rent-to-own industry has flourished. Promising no credit checks, small down payments and the option to return merchandise at any time with no questions asked, chains such as Rent-a-Center are raking in huge profits from a customer base that's swelled to 4.8 million people, up 67% since 2007, according to the Assn. of Progressive Rental Organizations.
Tires account for just a tiny slice of the $8.5-billion rent-to-own market. But they stand out from the industry's traditional fare because — unlike with a dinette set — giving back tires means not being able to drive to work.
"Tires are a necessity," said Jim Hawkins, a University of Houston law professor who studies the alternative finance industry. "These customers are vulnerable because they have no choice."
The first rent-to-own tire and wheel dealers appeared in the mid-1990s, targeting young urban males looking to spiff up their rides. Chains enlisted rap personalities such as Snoop Dogg and Busta Rhymes to hawk shiny customized rims and low-profile tires.
But after the economy crashed, dealers saw an influx of customers asking for standard passenger tires. Many new patrons were older and a surprising number were women, a group the industry had all but ignored.
Michelle Collins of Denham Springs, La., made her way to a Rimco store after her long-unemployed husband found work.
The tires on their Chevy Silverado were in terrible shape, too dangerous to be used for the long drive to his new job as an industrial painter. But they were such an odd size that the cheapest replacement set cost $1,340 at a regular tire store, far beyond Collins' budget.
The Rimco salesman said he'd get her rental tires for the same price and almost no money down — so long as she paid them off within 120 days. What Collins didn't realize was that the cost would skyrocket if she missed the "same-as-cash" deadline.
She found out the hard way.
This spring, Collins, who owns a used-book store, made her 18th and final monthly payment of $164.10, bringing the total price for the tires to nearly $3,000. That works out to the equivalent of more than 120% annual interest, quadruple the highest credit card rates.
"We couldn't risk losing the job over tires, no matter what the cost," said Collins, 40, who has five children living at home.
Like other tire rental stores, Rimco is undergoing a transformation thanks to changing customer demand.
Four years ago, 70% of Rimco's sales were aftermarket rims and the rest were tires; today that ratio is reversed. The chain, a unit of Atlanta rent-to-own giant Aaron's, has 28 stores and plans to open seven more by year's end.
The market leader is Rent-a-Wheel. With $100 million in sales, the company last year ranked as the nation's seventh-largest independent tire dealer, according to Modern Tire Dealer. The chain operates 89 stores branded as either Rent-a-Wheel or Rent-a-Tire, including 13 in California, and has aggressive expansion plans.
"It's a very young industry, but it has a lot of potential," said Matt Seaburn, president of the Los Angeles chain that was founded in 2006. "But we have to be careful about where we operate, who we deal with and how we deal with them."
Customers and employees of tire rental stores said that often translates to aggressive collection practices.
When Birdie Smith and her daughter rented four tires for their Infiniti sport utility vehicle at the Inglewood branch of Rent-a-Wheel, they were reminded they had to pay $41.90 every Saturday, in person.
But money was tight and they eventually missed a payment. Smith, who lives in South Los Angeles with her daughter and three grandchildren, was shocked to see a squad car pull up to their house a few days later.
"The police said we owed Rent-a-Wheel money and we'd better pay up," said Smith, a retiree who lives off Social Security income. Smith eventually paid off the tires in full, she said. "Those Rent-a-Wheel guys drive a hard bargain."
Police involvement is rare. But since rental companies technically own the merchandise until the last payment is made, some in law enforcement consider failure to pay tantamount to theft. Some contracts contain clauses allowing the dealership to enter a customer's property to repossess.
In Texas, where state law is favorable to rent-to-own companies, the Fort Worth Police Department has a special form just for stolen rental property claims. One section of it reads: "Has renter been told that a police report will be made and criminal prosecution will be pursued if property isn't returned?"
Dealers say they're sympathetic to customers' financial struggles, but they defend their tough tactics. To rent tires to people with bad credit, they have to assume risk that traditional lenders wouldn't — and their collateral can drive away.
Eric Malone, who owns eight RimTyme stores in North Carolina, Virginia and Georgia, was drawn to the business by the high profit potential. RimTyme averages more than $1.4 million a year in sales across its 25 locations, nearly double the take at parent company Rent-a-Center's traditional furniture and electronics stores.
His employees make about three repossessions a week. Malone said some new customers file for bankruptcy protection soon after getting new tires, hoping to shed payments and dodge the repo man. But they quickly learn that because they signed rental contracts, not loans, those can't be modified or discharged in court.
"Bankruptcy is just another way to get over," Malone said.
Don and Florence Cherry, the North Carolina couple who rented their tires from Rent-N-Roll last fall, filed for Chapter 13 bankruptcy protection after making just three payments on their tires.
A representative of Rent-N-Roll argued successfully in court that this was one debt that couldn't be negotiated: They could either "return the tires or pay them out."
They kept the tires.
"When you're working paycheck to paycheck, your options are limited," Florence Cherry said. "These tires were a lifesaver at any price."