Hot Tub Forum
Original => Hot Tub Forum => Topic started by: dazedandconfused on June 13, 2004, 07:29:13 pm
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I hear that based on your credit, this option is offered at SD dealers.
Is this a limited program or a standard financing program?
Also, do you have to make any payments within the 2 year program?
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You will have to ask a dealer who is using that plan. Some 'same as cash' plans offer no payments, others require regular monthly payments.
The ones with the payments are usually cheaper for the dealer, and are more common. Also, programs with a shorter terms are cheaper than ones with longer terms.
I offer a 90-day SAC program with deferred payments, and occasionally will offer a 180 day program. Ours have no prepayment penalty, so if you pay off before the due date you will have paid no interest or fees.
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2 things to keep in mind regarding these types of financing.
1. The dealers generally pay a fee for them, so you should be able to get a discount if you pay cash.
2. The bank is hoping you you don't pay it off in the time frame and may back charge you for interest for the entire time period, along with exorbitant interest rates and fees.
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Do you love spam in your email in-box? Wells fargo buys sales leads from people who fill your email box with spam for low interest loans that don't exist and are obnoxious on many fronts.
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2 things to keep in mind regarding these types of financing.
1. The dealers generally pay a fee for them, so you should be able to get a discount if you pay cash.
2. The bank is hoping you you don't pay it off in the time frame and may back charge you for interest for the entire time period, along with exorbitant interest rates and fees.
You should read the contract before you sign. The rate we offer is around 12%, which is neither great nor awful. With our program you do not pay any extra interest, and it's a revolving charge, so you can pay the minimum or pay it all off, and you can also add on items if you decide to buy more later.
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Every dealer is going to be different when it comes to financing. We are offering right now no interest no payment for 12 months with 20% down. All of the financing out there are simply attractive offers to get you into a tub . The same thing funiture and appliance dealers do.
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Thermospas is doing this now too... but not 2 years, one year. As long as you pay within a year of delivery there is no interest.
We also have a 30 day, 90 day and 180 day program.
All require a $500 down payment or the taxes, whichever is higher.
Z
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Debt is debt is debt.
Some debt is cheaper than others, some is more expensive.
Either way, it's still a liability which imposes on your assets or future cash flow.
If the asset you're acquiring with debt produces cash flow, debt is fine, your property is simply worth the net amount.
All debt is quite cheap right now. Straight forward deals are easy to assess as cheap or expensive, "free" debt with high back end rates are harder to figure.
There's no such thing as a free lunch.
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dazedandconfused,
I went with this plan, after reading the details 3 times.
It is 24 months with no interest and no payments. If paid off at the end of 24 months - that's it. If not, then each month is recalculated at 1.5% per month. The worst case would be no payments for the full period, which would add 42.95% interest after 24 months at the 1.5% per month rate. Apparently, Wells Fargo expects that a substantial number of folks will not pay off within the 2 years.
Also, they send you various junk credit offers during their time with you, which could be neverending. I received my first "free" money check for $3,064.62 this week. With interest at 17.99% per year (and no freeby period) including a fee of $122.58 as an origination charge for sending the check, they want $1255.38 in interest over 4 years (40.96% interest) with $90 monthly payments. This is clearly absurd. With federal reserve interest rates to banks at their lowest (1%) in 50 years, mortgage rates of 5 to 6% are easy, auto loans at 2 to 4 % are plentiful. Wells Fargo is advertising free money, but working hard to get usurious rates that would have been illegal for most of the past 50 years and should be now.
In any case, I'll pay it off just before the end, as I keep meticulous notes in my file with dates on when to pay. I would gladly have paid cash for a discount, but the dealer did not want the cash. The dealer told me he preferred the Wells Fargo plan, because they give him a kickback when folks take any of the junk credit offers. I plan to earn approximately 6% on the $10,000 (Note this was for the Maxxus at $8500 plus a lot of goodies - example 5 years worth of the double Sundance filters, exercise and rowing equipment, special Sundance tri-fold cover, special concave steps for the Maxxus, sales tax, etc.) that was advanced over the 2 years by keeping those funds in a money account with GM.
This is a good deal for someone with very good credit and the ability to pay the entire amount just before 24 months are up. For everyone else, this is a terrible deal.
You'll lose your shirt, just as Wells Fargo expects.
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Ah, you may want to read that again. I believe that the Well Fargo plan REQUIRES that you also make regular monthly payments as well as complete the payoof prior to the 24 month period. I also took advantage of the Wells Fargo offer a couple years back for a 10-year aniversary ring I bought my better half. I was required and made regular monthly payments for $169 for about 20 months. I then paid off the$5K balance with a check/cash before the 24-month period ended. It took Wells Fargo about 2.5 months to actually recognize this and agree that the debt was fully settled. So, go ahead and use it but make certain you meet the participation requirements and close the account a good 4 months earlier than your required too.
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There are many plans available, some have monthly payments, others are deferred payments.
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Electro,
Do you have a name or plan # of the financing program you are using with Wells FArgo. This would be useful info to share with my dealer when the time comes.
Thanks
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dazedandconfused,
As Chas has said, there are many plans that are possible thru Wells Fargo. I assume that the dealer or the manufacturer sets up the arrangements and you do not really have a choice, except to go with it or not.
The Wells Fargo application lists all the options, and the one I have is called "No Interest Option (Same as Cash)" under the Interest Terms, under the section on Special Terms.
The application does not look like or have the Wells Fargo name on it. It title says "You're Invited To Open A Preferred Customer Account". When you read the 5 fold double-sided application form in detail, you'll see that it is a Wells Fargo application.
I believe the dealer has some choice in the number of months (maximum of 24) and in whether you have to make some minimum monthly payments. I told the Sundance dealer that I wanted the same terms that local area Jacuzzi dealers were advertising and he said "Sure", although he admitted that it was not common for Sundance (as a supposedly better product with a different clientele than Jacuzzi). This credit offer is normally targeted at customers who are unable to pay much or even anything down and usually has a required monthly payment of about $80 to $100, whereas that would put you in the RED big time at the end of 24 months.
Electro