New car and new kitchen

w00519773

Altior said:

w00519773 said:

Altior said:

These are not related contingencies. 0% finance is a literal no brainer as the cost of paying it back in real terms will be lower than the original cost of the purchases. Whether to realise investment gains or not is really independent of that choice, and is what it known as timing the market (of course it would be different if the investing purpose was to fund said purchases). Perhaps you want to try and time the market, but that should not inform the decision to put the realised capital into discretionary spending. 

Fair point - I hadn't considered the time value of money.  It does seem to be literally a no brainer.  Apparently there are no early repayment charges as well.  There is literally no cost whatsoever.  Have I understood this correctly?

Effectively the cost of 0% financing is built into the purchase price. So I suppose, like most things in life it's not actually free in the truest sense. However there's nothing you can do about that as a consumer. There is also the theoretical risk of running into problems with the repayments in the future, generating penalties etc. So it wouldn't be for people who are poor at managing their finances. 

That makes sense.  I guess the cost is more negotiable if you pay by cash? What sort of discount would you ask for paying by cash.  They can always say no, but it is worth a try I guess?

w00519773

Altior said:

w00519773 said:

Altior said:

These are not related contingencies. 0% finance is a literal no brainer as the cost of paying it back in real terms will be lower than the original cost of the purchases. Whether to realise investment gains or not is really independent of that choice, and is what it known as timing the market (of course it would be different if the investing purpose was to fund said purchases). Perhaps you want to try and time the market, but that should not inform the decision to put the realised capital into discretionary spending. 

Fair point - I hadn't considered the time value of money.  It does seem to be literally a no brainer.  Apparently there are no early repayment charges as well.  There is literally no cost whatsoever.  Have I understood this correctly?

Effectively the cost of 0% financing is built into the purchase price. So I suppose, like most things in life it's not actually free in the truest sense. However there's nothing you can do about that as a consumer. There is also the theoretical risk of running into problems with the repayments in the future, generating penalties etc. So it wouldn't be for people who are poor at managing their finances. 

I guess I could ask for a discount for paying by cash? They can always say no.  How much of a premium would they add typically to cover the interest?

Altior

Nothing to lose, but I'm referring to retail scenarios where the price is what it is. Outsourcing financing in the background is a function of determining what the sales price is. However if you're talking about a brand new car purchase then retailers are not that interested in cash buyers nowadays, in fact there would ordinarily be a disincentive. Often there'd be finance deals on the table, eg dealer contribution, free servicing etc. 

w00519773

Altior said:

Nothing to lose, but I'm referring to retail scenarios where the price is what it is. Outsourcing financing in the background is a function of determining what the sales price is. However if you're talking about a brand new car purchase then retailers are not that interested in cash buyers nowadays, in fact there would ordinarily be a disincentive. Often there'd be finance deals on the table, eg dealer contribution, free servicing etc. 

Thanks.  is that the same for kitchens? I am not sure how to calculate a discount that I could request.

Albermarle

w00519773 said:

Altior said:

Nothing to lose, but I'm referring to retail scenarios where the price is what it is. Outsourcing financing in the background is a function of determining what the sales price is. However if you're talking about a brand new car purchase then retailers are not that interested in cash buyers nowadays, in fact there would ordinarily be a disincentive. Often there'd be finance deals on the table, eg dealer contribution, free servicing etc. 

Thanks.  is that the same for kitchens? I am not sure how to calculate a discount that I could request.

It is difficult because in reality a lot of these larger items have negotiable prices anyway.
You could ask for 10% discount for cash and they might say give you 5%. But they might have give you that anyway if you pushed hard enough. 

If it was me and the kitchen was costing £5,500, I would say how about £5,000 for cash and the deal is done. Might work, might not.

artyboy

Beddie said:

A hardcore money saver would say "I'm perfectly happy with my current car and kitchen, so I'll leave the money in the ISA and eschew the finance deal." 

And then when you come to sell your house, you'll be struggling to get the old banger started when the EA asks you to get it off the drive so they can take the publicity photos. 

Not that it will help of course because the manky old kitchen means that it will be listed as "in need of modernisation" at a £15k discount.

It's not always MSE to keep your hand in your pocket...

Shedman

Its not a Wren kitchen by any chance.....?

Albermarle

artyboy said:

Beddie said:

A hardcore money saver would say "I'm perfectly happy with my current car and kitchen, so I'll leave the money in the ISA and eschew the finance deal." 

And then when you come to sell your house, you'll be struggling to get the old banger started when the EA asks you to get it off the drive so they can take the publicity photos. 

Not that it will help of course because the manky old kitchen means that it will be listed as "in need of modernisation" at a £15k discount.

It's not always MSE to keep your hand in your pocket...

You can get banned on these forums for lesser things than Blasphemy