10% Discount on Omega and 0% Interest Free v. Cash
Discussion
No, pay up front if you have to. The money won’t offset the saving in that time frame. Omega and other brands have been clamping down on discounts. I would like to think 15% was still available depending on model and would call around to check.
Edited by stuno1 on Sunday 26th February 10:56
Edited by stuno1 on Sunday 26th February 10:56
Edited by stuno1 on Sunday 26th February 13:35
We have to work out our individual financial profiles to calculate the best option of cash or interest-free loads.
There is also the problem of having cash now, pay in full vs having a liability for 48months.
However, if you have interest free deal (free future money) while inflation (devaluation of currency) is running at 7 to 10%, I would opt for the interest free deal. Better so if you have other debts with interest to pay - use that cashflow and cash to pay down interest bearing debt. If no debt, maybe the cashflow and cash can be used to better effect than dumping all the 5k on a watch.
An interest free deal now could be seen as better than a 10% discount depending on the inflation profile and the rate manufacturers increase watch prices?
There is also the problem of having cash now, pay in full vs having a liability for 48months.
However, if you have interest free deal (free future money) while inflation (devaluation of currency) is running at 7 to 10%, I would opt for the interest free deal. Better so if you have other debts with interest to pay - use that cashflow and cash to pay down interest bearing debt. If no debt, maybe the cashflow and cash can be used to better effect than dumping all the 5k on a watch.
An interest free deal now could be seen as better than a 10% discount depending on the inflation profile and the rate manufacturers increase watch prices?
Bingowings said:
0% Interest Free Price £15500.
Cash Price £15097
Numbers have changed (+£10k) since my post. Principles stay the same.....Cash Price £15097
Edited by Bingowings on Sunday 26th February 19:28
1. You buy under 0% Finance deal. £15097 plus Finance admin of £403. (which is essentially same as 0.64%APR). £233/mo for 48 months. (Cheap money!)
2. Finance Company has to fund an asset at a minimum BoE base rate of 4%. That £15097 loaned (less £233/mo repayment) will cost them £1260 to finance (less also the £403 admin charge).
3. A watch manufacturer (plus distribution/AD/VAT) defers a sale at £15097. In 48 months time, at say a constant PPI inflation rate of 7.5 will sell that watch for £20360 in 4 years time to maintain its present value.
I would say is if you can put £15k to good work elsewhere and can guarantee you know you will always be able to repay, a zero finance deal looks like free money and a decent discount to me?
Edited by Guycord on Monday 27th February 11:47
Guycord said:
Numbers have changed (+£10k) since my post. Principles stay the same.....
1. You buy under 0% Finance deal. £15097 plus Finance admin of £403. (which is essentially same as 0.64%APR). £233/mo for 48 months. (Cheap money!)
2. Finance Company has to fund an asset at a minimum BoE base rate of 4%. That £15097 loaned (less £233/mo repayment) will cost them £1260 to finance (less also the £403 admin charge).
3. A watch manufacturer (plus distribution/AD/VAT) defers a sale at £15097. In 48 months time, at say a constant PPI inflation rate of 7.5 will sell that watch for £20360 in 4 years time to maintain its present value.
I would say is if you can put £15k to good work elsewhere and can guarantee you know you will always be able to repay, a zero finance deal looks like free money and a decent discount to me?
Indeed, talk about moving the goal posts! I would still pay up front if you have the money. Assuming you are looking at 15k watch I also assume you do have the money. However, little down and money in a stocks and shares ISA may now be more of an option. 1. You buy under 0% Finance deal. £15097 plus Finance admin of £403. (which is essentially same as 0.64%APR). £233/mo for 48 months. (Cheap money!)
2. Finance Company has to fund an asset at a minimum BoE base rate of 4%. That £15097 loaned (less £233/mo repayment) will cost them £1260 to finance (less also the £403 admin charge).
3. A watch manufacturer (plus distribution/AD/VAT) defers a sale at £15097. In 48 months time, at say a constant PPI inflation rate of 7.5 will sell that watch for £20360 in 4 years time to maintain its present value.
I would say is if you can put £15k to good work elsewhere and can guarantee you know you will always be able to repay, a zero finance deal looks like free money and a decent discount to me?
Edited by Guycord on Monday 27th February 11:47
Edited by stuno1 on Monday 27th February 13:07
simon800 said:
Which law does this break out of interest?
Its years since we offered finance so I am rather dredging up memories, from an FSA training session, I am sure the Consumer Credit Act 1974 specifically outlaws this and the SoGA (as was at the time) I cant believe the CRA would weaken consumer protection in this area, it also breaches the ASA guidelines on price transparency, you will get adverts taken down if you advertise 0% then discount if payment is made via an alternative method. The FSA was also very hot on this practice and would remove license from those who made a habit of discounting for non financed payment.
2 GKC said:
What makes that unlawful? I’ve had franchise car dealers do the same
They tend to advertise a very specific deal, as soon as you deviate from the advertised offer the 0% rate is no longer available they will not allow any alteration from the advertised, there is no ability to alter the deposit/ duration etc. The 0% finance is available providing you accept that specific advertised offer, the jewellers tend to advertise 0% with exclusions. They will allow larger deposits, payment over 3 or 5 years etc, so no specific offer is advertised, other than 0% finance. If a car dealer has offered you a car for price X at 0% finance or price Y if you pay via another method, and you can prove this, you could make their life rather difficult, as they demonstrably are not offering 0% finance. There is a cost attached to it.
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