Rent-to-Own Market Is Reaching Its Global Tipping Point
- MD Finance Team
- May 6
- 3 min read
The rent-to-own model offers flexible access to goods without the burden of ownership or traditional debt. Initially developed to help underserved populations, the RTO model is now gaining traction globally as consumers prioritize ease of use, predictability, and freedom of choice.
Rent-to-own is rapidly moving from a niche service for credit-strapped individuals into the mainstream consciousness as the “subscription economy” intersects with the traditional leasing model.
The RTO sector holds strong promise for digital lenders, retailers, and embedded finance providers. With urbanization, rising consumer debt, and the global shift toward access-based consumption, the market is expanding. Global consumer electronics and appliance rentals are projected to grow at an 11.4% CAGR, while the U.S. RTO market is advancing at a 7.3% CAGR. New players also emerge across Europe, Asia, and Latin America.
How Rent-to-Own Works and Why It’s Expanding
The rent-to-own model allows consumers to lease products with the option, but not the obligation, to purchase them over time. The agreements are structured as leases, which means consumers can return the item at any time without incurring the penalties that traditional credit plans impose.
While historically focused on furniture and appliances, the model has widened in both segments and geography. Now, RTO offerings include consumer electronics, jewelry, automobiles, and even real estate. Ticket sizes typically range from $250 to $3,000, accommodating a broad spectrum of consumer needs. Among all segments, consumer electronics is expected to deliver the strongest near-term growth globally, driven by rising demand from both subprime and middle-income consumers and accelerated by the ease of scaling via digital platforms.
The market's growth is also accelerating with the integration of virtual RTO options directly into online checkouts. Fintech players like Acima and Katapult offer rent-to-own terms for electronics and furniture across major retail platforms, while newer entrants target a wider range of products, including e-bikes and medical devices.
Key ROT market drivers include:
A growing preference for subscription-based access over ownership.
Rising household debt and tighter traditional credit in well-developed countries.
Greater consumer demand for upgradeability and product flexibility.
Urban migration and increasingly mobile lifestyles.
The RTO Market Landscape: Players and Progress
US-based players like Snap Finance (2.3M monthly site visits), Acima (part of Upbound, with $2.3B revenue in 2024), and Progressive Leasing are among the most established. In India, platforms such as Rentomojo and Furlenco have captured large urban markets by offering flexible leases on furniture and appliances, while startups like Allugator in Brazil and Telerenta in Romania push innovation with self-service rental kiosks and localized digital platforms.
Among European market leaders, Grover stands out. Founded in Germany in 2015, Grover has scaled across Europe and the US, based on an asset-light model and significant external capital. By 2024, Grover had raised more than €2.2 billion in debt financing, leveraging a special-purpose vehicle (SPV) structure to hold inventory. Strategic investors, including Samsung Next and LG Electronics, have joined, providing hardware at discounted rates to support Grover’s rental infrastructure.
Grover’s example illustrates the appeal of rent-to-own for digital-first consumers. Between 2015 and 2022, the average cost of a smartphone in Germany rose by 60% – while its service life extended to five years. Grover used this by renting devices multiple times and embedding checkout partnerships directly into retailers’ online flows, including MediaMarkt, Saturn, Conrad and others. The result: reduced fraud, higher conversion rates, and a younger, more engaged customers.
Global Trends in Regulation Policy
As the RTO model matures, regulatory policy is evolving. In the United States, RTO agreements are considered leases rather than loans, placing them outside the scope of the Truth in Lending Act. However, the Federal Trade Commission (FTC) plays an active oversight role. In a notable case, Progressive Leasing was fined $175 million for misleading marketing practices that obscured the full cost of rent-to-own plans.
By contrast, the United Kingdom treats RTO as a regulated consumer credit activity. The Financial Conduct Authority (FCA) has imposed robust measures, including a 100% total cost cap on rent-to-own products, requirements to benchmark prices against at least three mainstream retailers, and restrictions on insurance markups and penalty fees.
The European Union is now following UK practice. Under the Consumer Credit Directive (Directive EU 2023/2225), RTO agreements will soon be subject to the same standards as traditional credit products. This includes mandatory creditworthiness checks, APR disclosures, and protections even for small-ticket purchases under €200.
Such a tightening of the regulatory demands requires compliance and transparency from RTO providers. However, it also opens the door for fintech innovation built on consumer trust and responsible pricing.
Download the full report to explore more about the rent-to-own model and its providers.
