Can’t afford to buy a Ferrari? Rent until the slump is over (From The Northern Echo)

Can’t afford to buy a Ferrari? Rent until the slump is over

10:41am Tuesday 3rd March 2009 in Search By Jeremy Gates

IF this really is the sharpest economic downturn in more than half a century, can clever consumers ease their cashflow by renting many goods – both standard items and luxuries – instead of buying them?

The credit crunch is seen by the website erento, which launched in Britain last year and calls itself “the world’s fastest growing online rental market place”, as a key factor in the 92 per cent rise in site traffic recorded in January.

The figure emerged as the Office of National Statistics (ONS) confirmed the sharpest slowdown in consumer spending since the second quarter of 1991 – with the 4.5 per cent fall in production output, mainly in manufacturing, the worst since 1974.

Erento director Clinton Paterson said: “So many things can be rented to save money.

Suppose you want a digital SLR camera for a ski weekend to get great pictures for your PC. Rent one for £25 and hand it back afterwards.

“A Prada handbag is a fine product to enjoy for £15 a night, and next month, try another for £15. Much better than buying at perhaps £1,000 each.

“Or you can try a different sports car each weekend, ranging from £250 for a standard model to £10,000 for a Ferrari or Lamborghini worth half-a-million pounds”.

On erento, a Range Rover starts at £200 a day – but a 620hp Ferrari 599 GTB costs £2,200 a day and £5,900 for a three-day weekend.

For many of the 500,000 items available on its UK site, demand rises as summer approaches – motorhomes cost £450 a week, carpet cleaners about £29.50 per day.

And if lawn scarifiers (£40 a day, £80 a week) finally rout your moss, who needs one rusting away in the shed?

Rental demand rose in some sectors even in the boom – the proportion of rented TVs rose from two per cent in 2004-5 to nine per cent last year. Similar trends could soon emerge in jewellery, cars, laptops, possibly even pets.

Clinton Patterson says: “Given the slump in retail sales and the surge in our traffic, there may have been a profound movement towards renting instead of buying across a whole range of products.”

Currently active in the UK, US, Austria, Switzerland and Germany, erento aims to launch in 26 more countries, including New Zealand, South Africa and Canada, this year.

It claims to generate 505m euros (about £470m) in hire fees for 9,200 hire companies on its site, with 2008 turnover up 170 per cent on 2007. About 53 per cent of hires are by firms, 47 per cent by households.

Even in recession, says Clinton Paterson, plenty want a Harley Davidson at £75 a day.

Erento is owned by Holtzbrincke, a private German company which nurtures e-commerce ventures before selling them on.

Sarah Gartside, a spokeswoman at the consumer body Which?, says: “Although we have examined the economics of renting in recent years, erento is a sign that people are more interested in the idea.”