Do you have any views on rent-to-buy stores such as Brighthouse?

jaydeeuk1

topaztiger1983 wrote: »

I am not uneducated I completely understand that they charge high APR, you automatically think I am thick because I get stuff from BH

I do understand the reason you are all slating BH, but don' t slate me if I am as you say a "victim"

In my eyes, you're either a victim and have perhaps innocently fallen foul of the want it now society mentality fuelled on by a company willing to provide, or you're an absolute idiot happy to pay over the odds for something thats a luxury. Which would you prefer to be known as?

Pixie5740

Angry_Bear wrote: »

Hmm ...
Item: BH Elsewhere
Washing Machine: ............. £1404 ...........£400
Acer Laptop: .......................£1456 ...........£300 (couldn't find an Acer, this is based on the only laptop BH have at the moment)
Tumble Dryer: ................... £1404 ...........£490
PS4: ....................................£1300 ...........£400
Samsung S5: .......................£1445 ...........£350
HTC One M8: .....................£1383 ...........£500
Baird 42" FHD TV: .............£1482 ...........£450 (sony equivalent)
Tibo TV Stand: ...................£312 ..............£100

Total: ..................................£10186 ..........£2990

I found this post very interesting. You may as well just take thousands of pounds and set fire to it.

I did a little investigating of my own and found a PlayStation 4 Assassin's Creed bundle at BrightHouse and Game. BH sell it for £636.99 with a typical APR of 94.7% so paying £10 a week over 130 weeks means you end up paying £1,300 whereas you can buy it outright from Game at £399.99 and it's the latest instalment of the Assassin's Creed series unlike the BH "deal". :eek:

A Hoover washing machine from BH is initially sold for £1,015.99 then with a typical APR of 64.7% so by paying £12.50 a week for 156 weeks you end up repaying £1,950. The same washing machine can be purchased from Very for £549.00. :eek:

Each to their own, and if this is how people choose to manage their money then that's up to them. There's only so much the nanny state can do to pander to the lowest common denominator to try and protect them from themselves.

I agree that introducing financial education into the school curriculum would be a good idea as using companies such as BrightHouse is completely illogical to me.

MrsSave

I can almost understand someone using somewhere like bh as a one off. But, I would hope that from that one time, a massive lesson would be learnt, and that £10 a week or whatever would be put away into a separate account so the next time something breaks down the money is there to buy it outright at a fraction of the price.

When we moved into our current house, our tv broke down (it was old and second hand when we got it). We bought a new tv outright for less than £200. It is a decent size, but not one of the better known makes. We have lived here for 2 years now, and the tv works perfectly. Looking at the bh website, an equivalent tv is at £6.50 a week over 156 weeks, so you're looking at paying £1014. That's ridiculous.

One thing I don't understand, reading through previous replies, is why some people are members of a money saving site, though are happy to throw away hundreds and hundreds of pounds and then to hand the product back if they can't afford it. Basically you've paid for something and taken it back but not had your money back?

Mobile phone completely baffle me on the site. I haven't found one where you don't pay less than £1,000. You can buy a payg handset for under £10. Use that for the time being, and if you really, really want a posh, all singing all dancing, state of the art phone, save up and pay for it outright. You save a fortune.

I have made many financial mistakes in my time, and I'm paying for it now. But, thankfully, I've woken up to it and am paying it back, thankfully having never purchased a product at these ridiculous prices.

bsms1147

Pixie5740 wrote: »

A Hoover washing machine from BH is initially sold for £1,015.99 then with a typical APR of 64.7% so by paying £10 a week for 156 weeks you end up repaying £1,950. The same washing machine can be purchased from Very for £549.00. :eek:

195 weeks or £1,560, surely?

hohum

The thing with Brighthouse and similar is that on paper it's illogical, but pragmatically maybe not so much. For some people, the idea of of hundreds of pounds upfront seems really unobtainable, especially if living very close to the edge. I know, I used to be one! If you don't have any cushion, a couple of hundred pounds might as well be the moon. But smaller amounts are much more manageable. however, small amounts take time to add up. So to replace a washing machine, with transport if you don't drive, would be about £100. If you can only afford £50 a month, it will take you two months. However during that time, you will also be incurring costs of doing laundry elsewhere - from memory it costs about £8 for a few loads plus spinning at a laundrette. If you don't drive, add on taxis. So it's more likely you will take four months to be able to afford a replacement machine. That's about how long it took us. For some people that's just not an option. I actually think Brighthouse are a reasonable solution here, even though from a money saving point of view it's insane.

If you are poor, it's actually not insane. People living on very small incomes have to make quite different choices to those with means, and to understand them we have to start thinking differently. if you are poor, security seems further away. You live with higher risk, and perhaps can't take the risk that some money will be there in four months time. So you go for the goods, now.

If you take a loan/ hire purchase, you earmark the money for the purpose. Of course it would be better to save. But with savings, no-one is going to demand it from you. If the demands on your income and multiple and all compete, it actually makes sense to use something to make yourself commit to saving.

From a policy point of view, this seems to be the answer to me. The nudge or incentive rather than bellyaching about how stupid people are. they aren't stupid, they are working with a different set of values and variables. If there was a way to incentivise savings to increase their priority, this would be a better way to proceed rather than legislate re hire purchase. For example, credit unions offer Christmas saving schemes.If they are located in the right place, people who are excluded access to high street banking, can still engage with savings process. Credit unions could partner with suppliers to offer small discount on white goods bought through savings with their schemes, for example.

Herzlos

I think that's why so many people find it exploitative or even sleazy. There are people who genuinely do need to pay things up in small weekly instalments, but these companies only provide them with grossly overpriced goods with a focus on the instalments, so the people least able to afford have to pay way over the odds for these goods.

Whether that's selling stuff for double the price of other retailers, or only having mid-high range goods available, it's still exploiting the people who need to use them, and is completely avoided by anyone who can afford to buy elsewhere.

If they sold the value range of the goods at about RRP with 60% APR, I, at least, would haven't any problem with how they operate.

I'd be curious as to how many (if any) customers pay up front.

hohum

Herzlos wrote: »

I think that's why so many people find it exploitative or even sleazy. There are people who genuinely do need to pay things up in small weekly instalments, but these companies only provide them with grossly overpriced goods with a focus on the instalments, so the people least able to afford have to pay way over the odds for these goods.

Whether that's selling stuff for double the price of other retailers, or only having mid-high range goods available, it's still exploiting the people who need to use them, and is completely avoided by anyone who can afford to buy elsewhere.

If they sold the value range of the goods at about RRP with 60% APR, I, at least, would haven't any problem with how they operate.

I'd be curious as to how many (if any) customers pay up front.

Good point. Maybe a reasonable price tag plus the push toward viable alternatives/ savings that are incentivised.

On_my_way

Personally I would really avoid them - high interest rates on their HP "deals". Unless it is something that you must have (not a tv!) and you have no other way of getting it I would avoid it.

Somerset

hohum wrote: »

Good point. Maybe a reasonable price tag plus the push toward viable alternatives/ savings that are incentivised.

But the point is, that may be great for customers but not for the business so it won't happen. Thing is, everyone can think of a fairer/cheaper business model, some options have been discussed, but these shops/businesses don't exist - why ? If they could be run profitably they'd be on every high street, in competition with Brighthouse. If they aren't there - there's a reason, and that reason is they wouldn't make money. Which is why some co-ops ( I googled one in Aberdeen ) do supply goods at a fairer monthly cost - they are non profit organisations. Maybe members/MSE should be asking why more co-ops, charities etc aren't operating these schemes ?

On_my_way

foxgloves wrote: »

My views on these types of companies are that they do fulfil a need in some cases, but in an exploitative way. I would like to see their pricing come under scrutiny, also the alleged high pressure selling of expensive insurance/warranties. When we walk past this shop in our town, we are struck by the hugely expensive colossal TVs in the window, plus very large sound system gear, etc. Of course people have a right to decide what they want to buy, but I think that many of the customers who buy goods in this way may be vulnerable, & tempted into weekly payments for vastly over priced goods which are anything but essential. If they sold essential household items such as white goods, dining tables, beds, chairs, pots & pans, cookers, etc, at fair prices & offered a credit facility at low interest rates, I wouldn't have a problem with them, but the tempting window display of massive TVs is just there to tempt people to take out credit agreements for non essential stuff they can't afford. I agree with a previous poster that there is no culture of saving. It is harder on a very low income, but people did used to do it. My grandparents (born early 1900s) had an extremely small income, but Nan used to squirrel away tiny amounts which added up so that there would be a few quid to help with a rainy day. She used to say that whatever was leftover after bills & food, spend half, & save half.

My Grandparents were the same - they are both 98 now

I do think that a lot of problems we all face (and I am on a DMP for what it's worth!) is because we do not save enough and we do not prioritise enough. I should never, ever, have used that plastic for anything but I lived beyond my means because I was encouraged to so much by my horrid ex bf. Thank God he is my ex.