A startup based out of Germany has launched stateside to let consumers rent high-end gadgets, like AirPods or gaming laptops, instead of buying them. The company, called Grover, has raised more than $1 billion in funding since 2015 and says its European operations have already circulated more than 500,000 devices from the likes of Apple and Samsung.
Rent to own — Grover promotes its business as good for the environment, as a product’s usable life is extended as it is passed from one person to the next. For consumers, it’s a much more accessible way of acquiring high-end gadgets like an M1-powered MacBook Air — on Grover, you can rent the laptop for $49 per month rather than shelling out $1,000 upfront. What’s better is if you want to keep the laptop, all your monthly payments are applied to the purchase price.
It sounds too good to be true, and there are some caveats. Grover says it runs a “soft credit check” to verify eligibility, which could take up to a day to approve, and a negative report could prevent it from renting to you. It also covers 90 percent of the cost if you damage a device, or 50 percent for drones.
You have to choose a minimum rental length as well — devices can be rented for periods of 1, 3, 6, or 12 months, and the longer period you choose, the smaller your monthly payment will be. That makes sense because Grover pays for shipping and has costs associated with processing devices when they are returned.
Some products may be less ideal for rental, like headphones, which we’d be disinclined to share with strangers. Grover says it does a thorough cleaning of products before sending them to new customers, though.
Better than credit — Still, Grover is a very interesting concept. It’s basically like an old-school pay-to-own system or layaway, where you get to use the product while you’re paying for it. It’s also better than credit because you know exactly what you’ll pay and you can return the device if you’re unable to continue paying for it.
Other companies have tried to challenge credit cards through new options. Startups like Afterpay and rival Affirm are “buy now, pay later” startups that let you buy a product and then pay it off in fixed monthly installments. Grover is arguably even better, because you can simply return an item if you no longer use it, want to upgrade, or simply can’t afford the payments anymore. Some have argued these companies are a negative because they encourage people to borrow for non-essentials.
All of these companies operate under a similar business model of taking small margins from orders, or taking a cut from the seller in exchange for the business like Afterpay and Affirm do. Grover hopes that products will circulate for a long time and it can break even on each gadget. If you want to buy a rental outright, the company charges a little more than the retail price (though why you wouldn’t just buy it from the seller directly yourself in that case is a mystery).