0% Finance?

[Dave W]

Several bike shops are advertising this on bike purchase - what's the catch?
It seems at first glance to be a no brainer, leave your money in the bank and spread the burden.
Thing is I don't do credit so would probably have a dismal credit rating. On top of all that there must be a catch other than failing to make the final payment in time? Anyone purchased a bike in this way?

[Psamathe]

Never done these 0% things before, but people use to say to check for any "admin charges" (e.g. fixed fees for doing "paperwork", etc.). What charges are there other than interest ?

Ian

[blackbike]

Several bike shops are advertising this on bike purchase - what's the catch?
It seems at first glance to be a no brainer, leave your money in the bank and spread the burden.
Thing is I don't do credit so would probably have a dismal credit rating. On top of all that there must be a catch other than failing to make the final payment in time? Anyone purchased a bike in this way?

There's no catch at all.

You pay up when you are told and you pay no interest.

It is the same with 'buy now, pay later schemes' where you get the goods now and pay for them in full after a year, or whatever interval you agreed.

If you fail to make any payment on time you get clobbered with interest, usually backdated to the purchase date. That's how the lenders make money from people who take out the scheme but then are unable to meet payments on time. But if you are sure you can meet all payments you'll be fine.

But just like with a credit card, it is perfectly possible to pay no interest if you stick to what was agreed.

I've taken advantage of a few 0% deals and had no problems at all, and they are useful if the seller won't be battered down on price by haggling.

[reohn2]

We bought a livingroom suite(two couches and an upholstered footstool thingie)from Furniture Village(Middle Brook Centre for those in the Bolton/Horwich area).
It was by far the nicest retail experience and the best quality we'd seen.At the till the salesman offered interest free credit,I jumped at the chance for £2,300,sorted .
Two days later we got a flyer through the letterbox offering 10% off at the same store,so I thought I'd be cheeky and phoned the store,''no problem sir bring it in and we'll adjust the agreement'',and they duly knocked off £230! first rate company.
There's no catch.

[TrevA]

No catch - my wife bought her Specialized Dolce from Evans on 0% finance. She still got the 10% CTC discount - had to pay a 10% deposit and the balance over 12 months. Easy and good way to buy a bike for those who don't have access to the CTW scheme.

Only the larger chains can afford to do it, so it could be argued that it's driving the smaller LBS's out of business. However, there appear to be plenty of rich MAMILs (and MAWILs) with deep pockets, to keep them in business.

[foxyrider]

Just about any bike shop can offer it - a finance company run the scheme not the shop! You might find restrictions on what you can buy on 0% so its worth asking if you fancy the idea

[mapman]

There is no catch.
As a rule you'll pay the full retail price. The finance company will take their cut so the retailer can't give the customer a discount and pay the finance company.
Some places have a minimum purchase value to qualify for 0%.
Do your maths, if you feel happy go for it.
Mike

[andrew_s]

On the other hand, since the finance company are taking a cut, there could be mileage in haggling for a cash discount.

[andy65]

I bought a bike from my local independent bike shop this way. They offered it on any non-sale bike over £1000

[blackbike]

On the other hand, since the finance company are taking a cut, there could be mileage in haggling for a cash discount.

I don't know about small bike shops as regards credit, but most high street stores are very keen for people to sign up for interest free credit and won't offer cash discounts. They run their own credit operations. They know from experience that most people will pay off their debts on time and pay no interest, but they make loads of profit from the minority who don't.

I used to work for a national chain of catalogue shops. The minimum wage of the shop staff was boosted by tiny bonuses related to how many people they could sign up to any form of credit at all. The whole company was credit obsessed, and as it probably made the difference between profitability and bankruptcy that was entirely understandable.