Comments on: Is 0% financing worth it?

By: LAL

LAL — Thu, 02 Jul 2009 14:36:11 +0000

Ouch on wanting a procedure done you know doesn’t work. I noticed it’s a lot cheaper to pay cash to have a baby naturally uncovered than what insurance pays. But you don’t get to have the cash price if you have insurance paying for the birth. Same thing right?

By: Angie

Angie — Wed, 01 Jul 2009 22:30:10 +0000

My insurance wanted me to have a different surgery that would have been covered, but would only have lasted 2-3 years (I know, I’ve had it before). 3 different dentists and a periodontist all told me what I really needed. I decided to go with what would work long term, even though my insurance didn’t cover it. They knocked off almost 50%, so I was happy.

By: LAL

LAL — Wed, 01 Jul 2009 04:00:17 +0000

Angie why wasn’t it covered? I believe I would have shopped around if my dental wasn’t taken. I also would have asked for a discount and pushed harder. As it was I was covered 60% so negotiating a lower price wasn’t going to happen.

By: Meg from FruWiki

Meg from FruWiki — Wed, 01 Jul 2009 01:57:08 +0000

No, it’s not worth it — at least not for my husband and I. I used to think that it was because it mean that we could put more cash towards other things and save/make interest. However, the little bit of interest difference just doesn’t seem worth keeping up with the account(s), having that much more to work with on the budget, dealing with the companies when they try to screw you over, and just being in debt — which isn’t a feeling I like. Not to mention the temptation of spending more than you should!

I know it doesn’t make 100% financial sense, but we have decided to pay off our couch several months early even though we’re still paying (moderate) interest on other debts. Why? Because we want it off of the spreadsheet where we see it every time we budget. We want to stop worrying about forgetting to pay it off — or forgetting to have enough extra cash available when it’s due, or having the company say that we paid late when we didn’t, etc. We want to sit on it and know that it is really and truly OURS. It might not be the same as having our home paid off, or even being out of credit card debt, but I think it’ll be good motivation for us.

And my husband and I have already agreed, we don’t want to buy more stuff with 0% financing because if we don’t have cash then that’s our sign that we can’t afford it. We know we’ve used it as an excuse before and we will again if we don’t draw a line. We tried before to get out of debt but we didn’t because we didn’t change our habits enough — we kept using credit.

By: MLR

MLR — Tue, 30 Jun 2009 23:20:21 +0000

0% is definitely worth it, ceteris paribus.

However, people often times upsell themselves from the $500 laptop to the $1200 laptop because its an interest free loan for 12 months (or w/e the item is).

As far as cash discounts are concerned, I don’t have much luck with that. If the item is clearance or open box, though, then I can usually get them to knock it down a little more.

By: R. May

R. May — Tue, 30 Jun 2009 19:35:32 +0000

It’s worth it if you are a super disciplined person.

The longer that money sits in the bank the more money you make on it.

The whole reason they offer that thought is because most people just aren’t that disciplined – they forget or such and then get stuck paying a crapload of fees and interest.

By: Petunia

Petunia — Tue, 30 Jun 2009 17:08:12 +0000

I think that if you plan on buying item x anyway, then why not buy it with 0% financing? I think there is an inherent danger though, it may entice you to buy something you weren’t planning on buying. Or you pay more for the item instead of shopping around.

I have used 0% financing deals several times, I set the cash aside, pay the minimum payments, then pay in full one month before the deal expires. I don’t milk it for that last month, I don’t want some sort of processing delay to make that deferred interest kick in!

By: Angie

Angie — Tue, 30 Jun 2009 16:05:15 +0000

I got a $2800 discount from my dentist in April/May. I was having $5800 of work done that my insurance wouldn’t cover (not cosmetic, just not covered!) and they agreed to take 3k if I paid up front. Much better deal for me than 0% financing for one year!
Another girlfriend of mine received a 25% discount from her dentist for her daughter’s work, and her insurance had covered a big chunk of it. My sister and her husband had almost 1k knocked off of their daughter’s hospital bill for paying up front. I think it all depends on how much the bill comes to after insurance. My theory is, hospitals and dentists are worrying about people not paying, so on big bills, they are willing to make deals because it is cheaper than paying someone to keep billing you before they sell it to a collections agency.

By: JoeP

JoeP — Tue, 30 Jun 2009 16:03:07 +0000

The only danger with those deals is not paying them off before the term is up. Lots of those have retroactive interest in the 20% range. The only benefit I can see of this kind of deal for financially responsible folks is eking out a little interest during the term, or for the reason cited by Tom.

Even if you have money in hand and put it in a lock box or interest bearing account, I would absolutely make sure I had an adequate EF. Imagine the situation you’d be in if you had to finance an unplanned car repair or roofing job, and ended up defaulting on this “deal.”

By: tom

tom — Tue, 30 Jun 2009 15:19:01 +0000

Yes… it’s worth it. I did the 0% financing for 3 years from Best Buy for our washer, dryer and TV. I did take advantage of the 90 price guarantee on the TV. It was discounted somewhere else after I bought it and I got $200 back. Funny thing was that BB was surprised I came back, they said most people buy stuff and never take advantage of the 90 day guarantee.

I did ask for a discount at Best Buy once last year. My father-in-law was buying a LCD TV and I knew that Best Buy had 10% off coupons they send to Reward Zone customers so I asked for one and they were happy to give it to us.

As a personal rule, I only do 0% financing if I have the cash available and can pay off the debt at anytime. I use the cash on hand to pay the minimum charge and the rest collects interest until I have to settle the remaining debt at the end of the 0% term.