The History of Rent-to-Own: From Local Furniture Stores to a $12 Billion Industry

The rent-to-own industry has grown from a handful of local furniture rental shops in the 1950s into a $12 billion market serving roughly 1 in 27 American households each year. Understanding this history matters because it reveals why RTO works the way it does today, and why it exists at all. VRTO (Virtual Rent To Own) is the leading directory for rent-to-own stores nationwide, and this guide traces the industry's path from neighborhood storefronts to a digitally connected network of over 10,000 locations.

The 1950s and 1960s: Furniture Rental Is Born

Rent-to-own did not start as a consumer movement. It started as a practical solution. In the 1950s and 1960s, small furniture stores in the American South and Midwest began offering rental agreements to customers who could not qualify for store credit but needed a bed, a table, or a sofa immediately. These were not chain operations, they were locally owned shops where the owner knew the customer by name.

The arrangement was simple: pay a weekly fee to use the furniture. If you kept paying long enough, you owned it. If your circumstances changed, a job loss, a move, a family emergency, you returned the items and owed nothing more. There was no credit application, no debt, and no lasting financial obligation. The flexibility was the product.

These early agreements were handshake deals in many cases. There were no standardized contracts, no state regulations, and no industry organization. Each store set its own terms. The concept worked because it solved a real problem: people needed furniture, could not afford to buy it outright, and either did not have or did not want credit.

The 1970s: Growth and the First National Players

By the 1970s, the rental-purchase model had proven itself in enough local markets to attract entrepreneurs who saw national potential. Stores began expanding beyond furniture into appliances, washers, dryers, refrigerators, and televisions. The core appeal remained the same: no credit check, weekly payments, and the right to return at any time.

Several regional chains emerged during this decade, establishing the multi-store model that would define the industry. The business economics made sense: a single refrigerator could be leased, returned, refurbished, and leased again to multiple families. This circular model, where products serve several households over their useful life, kept costs manageable and created a sustainable business even in low-income communities where traditional retail struggled.

It was also during this period that the fundamental legal question took shape: is a rent-to-own agreement a lease or a credit sale? This question would drive regulatory debates for the next five decades.

The 1980s: Industry Organization and Aaron's Expansion

The 1980s were the decade that transformed rent-to-own from a regional practice into a recognized industry. Two developments stand out above all others.

First, the Association of Progressive Rental Organizations (APRO) was founded in 1980. APRO established the industry's first Code of Ethics, anchored by a statement that still defines the industry's aspirational standard: "We believe in the dignity of the consumer." APRO created a framework for self-regulation, lobbied state legislatures for clear legal definitions, and gave the industry a collective voice.

Second, Aaron's. which had been founded in 1955 by R. Charles Loudermilk Sr. as a furniture rental business in Atlanta, began its aggressive national expansion. Aaron's proved that rent-to-own could operate at scale while maintaining the local-store feel. By the end of the 1980s, Aaron's had hundreds of locations across the Southeast and was pushing westward.

The 1980s also saw the emergence of state-level regulation. Legislators recognized that RTO agreements were neither traditional rentals nor traditional credit sales. They were something new, and they needed their own rules. States began passing rental-purchase statutes that required specific disclosures: the cash price of the item, the total of all payments, the right to return without penalty, and reinstatement rights for customers who fell behind.

1986: Rent-A-Center and the National Chain Model

Rent-A-Center was founded in 1986 and quickly became the largest rent-to-own chain in the United States. Where Aaron's had grown organically through company-owned stores, Rent-A-Center grew through a combination of new openings and acquisitions, consolidating smaller regional operators into a national brand.

Rent-A-Center's growth demonstrated the scale of unmet demand. By the early 1990s, the company had thousands of locations coast to coast, each serving customers who could not or chose not to use traditional credit. The industry was now generating billions in annual revenue, and the "no credit check" model was serving millions of American households.

The 1990s and 2000s: Regulatory Maturity

By the mid-1990s, 47 states had enacted RTO-specific statutes. The FTC had classified rent-to-own as a leasing market rather than a lending market, establishing the legal framework that persists today. These statutes typically required:

• Clear price disclosures. the cash price, the total cost of all payments, and the difference between them
• Return rights. the customer's right to return the item at any time and end the agreement
• Reinstatement provisions. the right to restart a returned agreement and retain accumulated equity
• Service obligations. the store's responsibility to repair or replace defective items during the lease
• Early purchase options. disclosure of how and when the customer can buy the item outright at a reduced price

Three states, Minnesota, New Jersey, and Wisconsin, took a different path, classifying RTO as credit sales subject to consumer lending regulations. Even in those states, the core RTO model continued to operate, though with additional compliance requirements.

The regulatory framework gave consumers clear protections and gave the industry legal certainty. RTO was not credit. It was not a traditional rental. It was a defined category with its own rules, and both consumers and stores knew where they stood.

The Digital Transformation: Virtual RTO and Progressive Leasing

The 2010s brought the most significant shift in the industry's history: the move from physical storefronts to digital platforms. Virtual rent-to-own. also called point-of-sale leasing, allowed consumers to use RTO at traditional retailers rather than visiting dedicated RTO stores.

Companies like Progressive Leasing (founded in 1999, scaling nationally by the 2010s) and Acima partnered with retailers such as Best Buy, Ashley Furniture, and tire shops to offer RTO at the point of sale. A customer shopping at a traditional retailer who was declined for store credit could instead opt for a lease-to-own agreement, same product, same store, different payment structure.

This virtual model expanded the RTO market dramatically. Consumers who would never have walked into a dedicated RTO store were now encountering the option at retailers they already frequented. The total addressable market grew, and so did scrutiny from regulators and consumer advocates.

2024: CFPB v. Snap Finance, The Legal Landmark

The question that had lingered since the 1970s, is RTO credit or is it a lease?, received its most definitive answer in 2024. In CFPB v. Snap Finance, a U.S. District Court in Utah ruled that rent-to-own agreements "did not give consumers any right to defer the payment of debt." Because there is no debt, the customer can return the item and walk away at any time, the agreement does not meet the legal definition of credit. The CFPB's suit was ultimately dismissed with prejudice in May 2025.

This ruling reinforced what 47 state legislatures and the FTC had already established: RTO is a terminable lease with an option to purchase, not a credit transaction. The distinction matters because it determines which regulations apply, how consumer protections work, and how the product is disclosed to consumers.

The Industry Today: $12 Billion and Growing

Today, the rent-to-own industry generates approximately $12 billion in annual revenue across more than 10,000 store locations in all 50 states, according to APRO. The industry serves roughly 1 in 27 American households each year, a figure that reflects persistent demand driven by structural factors in the American economy.

The CFPB estimates that 26 million American adults are credit invisible and another 19 million have credit files too thin to score. Together, these 45 million adults represent a population larger than the state of California, and most of them are working people with steady income who simply fall outside the traditional credit system. Rent-to-own exists because the credit system was not built for everyone.

Major industry players today include:

• Aaron's / The Aaron's Company. founded 1955, publicly traded, approximately 1,300 company-operated and franchised stores
• Rent-A-Center. founded 1986, acquired by Upbound Group, approximately 1,900 stores plus virtual RTO through Acima
• Buddy's Home Furnishings. franchise model, approximately 300 locations focused on furniture and appliances
• Progressive Leasing. virtual RTO at thousands of retail partner locations
• Acima. virtual RTO subsidiary of Upbound Group
• Independent operators. hundreds of locally owned stores, many serving their communities for decades

What RTO's History Tells Us About Its Future

The rent-to-own industry has survived and grown through seven decades because it solves a problem that has never gone away: the gap between needing something now and being able to pay for it all at once. The Federal Reserve reports that roughly 40% of Americans cannot cover a $400 emergency expense without borrowing. The Pew Charitable Trusts found that nearly 60% of American households experience month-to-month swings in income or expenses.

As long as income remains volatile and the credit system excludes tens of millions of working Americans, the demand for a flexible, no-credit, return-anytime option will persist. The format may evolve, from furniture shops to national chains to virtual platforms, but the underlying value proposition has remained remarkably consistent since those first stores in the 1950s: use what you need, pay what you can afford each week, and walk away if your situation changes.

Browse the VRTO national store directory to find rent-to-own stores near you, or explore furniture, appliances, and electronics categories to compare options in your area.