How much crap do you have on hire purchase?

Where it makes sense and the numbers work out vs cash discount (rarer and rarer nowadays), I'll always use another entity's cash vs my own. I generally have savings and investments that range from 5% - 22% return and I'd rather keep those where they are, so if HP/Finance offers lower then it makes sense.


Things I can think of off the top of my head that I've used finance for over the years:

Car
Sofa Set
EMTB
New Kitchen

Things I probably will use it for in the future:
New Windows/Doors at home.

As long as it's not abused and used sensibly it's a good tool for keeping things simple and allowing better management of cash/assets. Each to their own though, I can respect people's views where they don't like to be in debt to anyone. It's a different peace of mind.
 
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If what I want to buy is quite a bit of money and I can get it at 0% then I might use it.

Other than house and car, if it's going to cost me in interest, I won't finance a purchase.
 
Nasher said:
Other than a house and maybe a car if you have to take a loan out to buy a thing, you can't really afford it.
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Depends what we mean by "afford it".

In the purest sense, If you make all the loan repayments, then it was affordable. Plenty of things you can't buy outright are affordable with a loan, because requiring a loan is just addressing the amount of cash you have today, not the amount of cash you'll have over the course of the loan. There's plenty of people out there who have high earnings and low wealth for whom loans are very affordable.

If we mean "makes financial sense" then it's not quite so clear cut. Often people who take out loans to buy stuff would actually be able to get MORE stuff in the longer term if they didn't rack up expensive debts, i.e. they exchanged future spending power for servicing their debts.
 
Bassmansam said:
Whats hire purchase? I have a ps5 on buy now pay nothing for 12 months at the indian electrical store
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Something where you pay for long periods of time at exorbitant interest rates and you don't own until you've made the final payment. If you fail to keep up payments you risk it being repossessed by the finance company. A bit like a mortgage for goods etc. Used to be common for lower paid working class families often called the never-never or "on the tick" meaning you didn't own it until you paid off every last penny. Often confused with bank loans and credit purchases but not the same at all.

HangTime said:
Depends what we mean by "afford it".

In the purest sense, If you make all the loan repayments, then it was affordable. Plenty of things you can't buy outright are affordable with a loan, because requiring a loan is just addressing the amount of cash you have today, not the amount of cash you'll have over the course of the loan. There's plenty of people out there who have high earnings and low wealth for whom loans are very affordable.

If we mean "makes financial sense" then it's not quite so clear cut. Often people who take out loans to buy stuff would actually be able to get MORE stuff in the longer term if they didn't rack up expensive debts, i.e. they exchanged future spending power for servicing their debts.
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Lots of people take out loans for expensive items and thats fine if you have an income but not the ready cash thats what they're for. HP on the other hand is a millstone around your neck my stepfather had a car on HP and it was literally falling apart but couldn't afford to get rid of it as needed it for work but up to the neck in debt so could barely keep up with repayments and often threatened with repossession. Finally paid of last payment and only fit for scrap really it had gone on for so long and couldn't even legally sell it on before as it belonged to the finance company until the very last payment
 
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Sofa on 0% finance, house and a plot of land on mortgage. Previous car was on finance but current one is paid off. Some credit card balance but mostly work related for stock purchase on 0%.
 
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