AO.com has said its customers can now rent a washing machine from the internet company for as little as £2 a week as part of a new white-goods rentals service it is trialling.
The Bolton-based online appliance firm said it is offering an 8kg Candy washing machine for £2 a week with no hidden extra costs, no upfront payment and “no catch”.
“This includes delivery, full insurance, repairs and recycling of any old appliances without any credit checks. Customers can also cancel at any time and arrange for collection of the washing machine free of charge,” AO said.
The firm said the new service is a “significant step in its strategy of developing existing categories and services, and adding new complementary categories for the benefit of customers”.
It comes shortly after AO founder John Roberts took back the reins as head of the firm from Steve Caunce, who stepped down in February amid flagging investor appetite.
AO shares have sunk to all-time lows in recent days, hitting rock bottom earlier at 95.7 pence. It reported a pre-tax loss of £5 million in its half-year results to the end of September 2018.
Roberts said the new rentals initiative is “a totally different approach” from the rentals offers currently available, adding that after five years, customers can replace the appliance with a new one and send the old one back to AO for refurbishment or to be recycled.
Roberts believes the e-tailer is uniquely placed to make electricals rentals affordable because of its business model.
“AO owns a nationwide logistics business with trucks delivering to every UK postcode daily, one of Europe’s most advanced electricals recycling plants that produces valuable metals and plastics that are sold on for future use, and it has positive relationships with major manufacturers through AO.com.
Roberts added: “This is yet another example of what we do best – disrupting the market in the AO way.
“It’s a straightforward £2 per week payment with no upfront charges and no catches, so that customers know exactly what they are paying for their washing machine from the start.
“It’s a totally different approach to the current rental offers out there and I believe that we’re doing better.
“Our advantage is that we own most of the supply chain. This keeps our costs low, meaning we can save customers hundreds of pounds a year when it comes to renting electrical essentials.
“Of course, rental has appeal for a broad range of customers, not just those on lower incomes. It’s early days for us, but I’m optimistic about the potential.”
AO said it has partnered with two housing associations in England and Scotland with an ambition to reach thousands of families over the next year if the trial works.
Measures to crack down on abuses in the rent-to-own (RTO) sector came into force this week after an investigation by the UK’s financial regulator found that in some cases customers were paying more than four times the cost of the product over the lifetime of the deal.
AO also said it would be recruiting 50 new IT roles across its Bolton and Manchester offices in its “biggest ever IT recruitment drive” since the company was founded in 2000.
The firm said the new roles would enable the business to quickly adapt to opportunities to make online shopping as easy as possible. To accommodate the expansion, AO said it has taken a second office at Parklands Business Park in Lancashire.