Other Do you think 24 month financing on phones is detrimental to people?

[The-Real-Deal82]

Given what I heard on the news this morning I doubt most people have a mortgage! Apparently quite a few will never get to own their own home (but probably have the latest iPhone! )

That can certainly be true. For example some of the nicest cars in the car park at my work are owned by guys who either live with their parents or rent. It’s not always the case though. It all depends on what people choose to prioritise with their spending and why you can’t always judge on appearance.

 

[Apple fanboy]

Suppose techinally you never own your own home until that mortage is paid off anyway

Finished mine at 33
[doublepost=1523981449][/doublepost]

That can certainly be true. For example some of the nicest cars in the car park at my work are owned by guys who either live with their parents or rent. It’s not always the case though. It all depends on what people choose to prioritise with their spending and why you can’t always judge on appearance.

So true. I used to be one of the top earners at my last place, but drove one of the oldest cars. But I bought it cash.

 

[The Game 161]

Finished mine at 33

you are clearly one of life's legends then would take people double that on average I bet.

 

[The-Real-Deal82]

Finished mine at 33
[doublepost=1523981449][/doublepost]
So true. I used to be one of the top earners at my last place, but drove one of the oldest cars. But I bought it cash.

I only ever take out small car loans on top of the part ex value when I change my car. I like to change it every 3 years so I don’t lose too much money in the long run. To me it’s the same as saving the cash over the same period of time so makes sense for me.

 

[Apple fanboy]

you are clearly one of life's legends then would take people double that on average I bet.

Moving out of London and an inheritance helped, but we could still have chosen to spend it all instead of finishing the mortgage off. We made that a priority.
[doublepost=1523982835][/doublepost]

I only ever take out small car loans on top of the part ex value when I change my car. I like to change it every 3 years so I don’t lose too much money in the long run. To me it’s the same as saving the cash over the same period of time so makes sense for me.

Whatever you do with cars they cost you.

Run an older model expect higher running costs as things fail.

Run a new model you lose it on depreciation.

I try and go somewhere in the middle. I have a late 2014 Volkswagen Golf TSI.

Low mileage means I'll probably keep it another 4-5 years.

 

[chasonstone]

Short answer: No I don't think it's detrimental to people

With 0% interest, it's not costing the consumer any more to spread the payments out. Generally, I would say it's best to not buy something you cannot afford in cash (except house, car, education). I would say the same thing for a phone, but if you make a steady income to readily and reliably have the payments. There is really no reason no to do the installment plan at no interest to you, it actually would probably allow you to never take a $1,000 dent in your initial bank balance and keep it steady.

In alot of way I guess it would make more sense to take advantage of these 0% interest types of plans for purchases and have more money in the bank to put down on your big purchases that don't have 0% interest.

 

[The-Real-Deal82]

Whatever you do with cars they cost you.

Run an older model expect higher running costs as things fail.

Run a new model you lose it on depreciation.

I try and go somewhere in the middle. I have a late 2014 Volkswagen Golf TSI.

Low mileage means I'll probably keep it another 4-5 years.

That’s the general rule of thumb yes.

 

[gtg465x]

My personal motto is to never buy anything I can’t afford in cash. The only 3 exceptions are my house, vehicles and my kids college education.

Definitely agree with this. I sold an old iPhone 6 to someone on Craigslist yesterday and was surprised to see he was transferring over his SIM from an undamaged iPhone X. I can't say for sure why, but the only explanation I can think of is that he couldn't actually afford an iPhone X, bought one, and then realized he needed to sell it or return it to be able to pay his other bills or something.

I can sort of get financing a phone at 0% if you would rather have the money available to invest, but even assuming 7% returns on whatever you're investing your money in, you'll only make about $70 over 2 years by investing the unpaid portion of a financed iPhone X. For me, that's not worth the headache of having one more bill and something else I need to do should I want to sell the phone, so I just buy my phones outright. Plus, buying outright reminds me that a phone is a $1000 purchase, which makes me really consider whether or not I need to upgrade.

 

[CPTmom2wp]

The $475 dinner point is we chose how to spend out money and when.
This thread to me apeaks volumes of a lot of social issues. Some people abuse it so maybe it’s not a good idea.
Yet on another topic, a newly graduated college grad mentioned he didn’t know how to balance/reconcile a checkbook.
Interesting.
On one hand people think some people should have been he expensive iPhone because they “can’t” afford it but yet people are entering into the working society without basic financial skills.

Where does the problem lie

No criticism of the dinner and agree that we are all adults who choose our own priorities. I had absolutely no need for the iPhoneX but can make the decision to buy it in whatever way it fits into my budget.

In a word: schools......ok, another word...... parents. Many high schools have eliminated the basic Intro to Business class where a lot of us learned to balance checkbooks, do budgeting, calculate credit, make good consumer decisions like buying cars, appliances, tech, houses, and figuring interest on those purchases, and some rudimentary investing skills. However, parents have also forgotten how to teach these skills, either overtly or through setting a good example.
I've noticed also, that kids who operate cash registers cannot usually make change or count it back to customers. They only know what the register tells them.

I think out of the many things that we could do to easily to help future generations, it would be to teach basic money handling skills.
[doublepost=1523985490][/doublepost]

......... so I just buy my phones outright. Plus, buying outright reminds me that a phone is a $1000 purchase, which makes me really consider whether or not I need to upgrade.

Isn't it funny too, having purchased phones both ways......that I am much more careful with my phone when I have paid out $700-950 in cash than I am when it's on payments. It's covered by AppleCare both ways. Maybe it's that feeling you really did just spend $900 and have something valuable rather than the $40 a month upgrade.

 

[44267547]

Short answer: No I don't think it's detrimental to people

With 0% interest, it's not costing the consumer any more to spread the payments out. Generally, I would say it's best to not buy something you cannot afford in cash (except house, car, education). I would say the same thing for a phone, but if you make a steady income to readily and reliably have the payments. There is really no reason no to do the installment plan at no interest to you, it actually would probably allow you to never take a $1,000 dent in your initial bank balance and keep it steady.

In alot of way I guess it would make more sense to take advantage of these 0% interest types of plans for purchases and have more money in the bank to put down on your big purchases that don't have 0% interest.

Excellent post. In short, I think there are things that should not be financed and other things that should be, smart phones I don’t think are something that is a major concern as long as the consumer abides to the agreement purchase, has a decent credit history and makes the necessary payments. With upgrade programs today, a lot of consumers don’t intend on owning their iPhones, which financing them having or half paid off, allows them to upgrade to another device later on if they want. I mentioned it before, there really is no wrong answer based on how somebody justifies costs.

 

[JPNFRK7]

I know people that spend more on pot/alcohol a week than I do a month on a phone.

I know people who spend more on coffee a month.
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After having phones on contract for the last 6 or 7 phones. I will just outright buy phones. I prefer buying the phone and getting to do whatever I want to it without the lender or carrier having a say. Do the same with cars. I get much more use out of items than the average joe.

 

[Raist3001]

I prefer buying the phone and getting to do whatever I want to it without the lender or carrier having a say. Do the same with cars. I get much more use out of items than the average joe.

I'm an average Joe. What do you believe you can do that I can't with my financed phone or car?

 

[Apple fanboy]

I'm an average Joe. What do you believe you can do that I can't with my financed phone or car?

Switch when you want to a different model or carrier?

 

[bruinsrme]

Switch when you want to a different model or carrier?

iPhone upgrade program is independent from carriers. I can use any carrier even pay as you go with a little creativity

 

[C DM]

Switch when you want to a different model or carrier?

You can simply pay off what remains and do something like that. In fact, using a different device/model can be done without any of that. So basically at worst it's not really any different than just paying in full up front.

 

[PhoneMe1]

There is so many bargains if you are prepared to wait and not buy on release on contract, i have just bought 2 as new 8 plus and 8 for my wife and daughter so when their current plans finish in a few months i can put them on sim only plans at more than half the cost paying now.
8 plus 256gb 10 days old for $670AUD less than Apple new price here and 6 256gb 7 days old $729 less.

 

[Fthree]

Do not patronise me. And try reading/quoting my entire post rather than quoting the sentence out of context that suits you best. If you had, you’d have seen that I was talking about people taking personal responsibility for their commitments.

I am 32, perfectly in control of my finances and my assets far outweigh my liabilities thank you very much.
[doublepost=1523962765][/doublepost]
Exactly what i’m saying - it’s about people being astute enough to know what they’ll do in an emergency.

But most people aren’t debt free as they have at least a mortgage - hence the need for insurance.

I reread your post and it seems as if maybe the sentence I quoted i could have taken out of context. My apologies I didn't mean anything toward you just the fact that that view is why SO many people have debt that they will never pay off.

 

[poorcody]

Whatever you do with cars they cost you.

Run an older model expect higher running costs as things fail.

Run a new model you lose it on depreciation.

I try and go somewhere in the middle. I have a late 2014 Volkswagen Golf TSI.

Low mileage means I'll probably keep it another 4-5 years.

Consumer Reports did a detailed analysis on this many years ago... they found the most economical thing to do (i.e. spend the least amount of money) was to buy a high reliability car new, and keep it as long as possible (ideally over 10 years).

 

[JUCJ85]

Bought my 6S+ on ATT Next, paid within the period I agreed too, bought 2 iPad Pro's on ATT Next, have only $183 and change left on each, yet to miss a payment, and only 7 payments left($282 and change) on my 7+, again no missed payments. I'm also not overpaying, as I'm paying the same price($969 for a 256gb 7+) over 24 months than what I would had to upfront, which I can't afford to drop over 1K with taxes on an iPhone.

 

[puma1552]

For the record I bought my 8 with Verizon device payment and nothing down. It was just nice to be able to buy it without parting with $800, which I could have done. I just didn't want to, simple as that. I can pay it off anytime I like.

 

[Toonartist]

I have more than enough to pay for my iPhone X outright... several in fact but, I still buy mine on the IUP with 0% interest over 20 months.

Why? Well Why should I pay more to buy it outright now? The money can stay in an interest bearing account and make me money while I can pay the phone off overtime with no additional cost (no interest). The money is there to pay it off if necessary but it does't make financial sense to throw away interest on my savings when I won't pay interest on the purchase!

 

[44267547]

For the record I bought my 8 with Verizon device payment and nothing down. It was just nice to be able to buy it without parting with $800, which I could have done. I just didn't want to, simple as that. I can pay it off anytime I like.

Excellent post. For those who seemingly don’t understand in this thread, you have options. And it’s all about convenience that if you wanted to pay full price, you very could have. And why not take advantage of something that doesn’t affect you negatively and there is no interest.

 

[Raist3001]

Switch when you want to a different model or carrier?

I can do that. What else?

 

[craigio85]

I reread your post and it seems as if maybe the sentence I quoted i could have taken out of context. My apologies I didn't mean anything toward you just the fact that that view is why SO many people have debt that they will never pay off.

No worries - thanks.

I do agree - many people either are trouble with their debts or skating on very thin ice. It’s caused by a combination of outright recklessness in taking more than they can handle, failing to adjust their lifestyle costs downwards to accommodate new debts or failing to cover themselves for unexpected changes of circumstance.

But to return to the post subject, finance in itself is not a bad thing and can be useful and convenient for consumers who understand it well enough and are doing it for the right reason.

 

[ActionableMango]

My personal motto is to never buy anything I can’t afford in cash.

That's pretty easy to say if you can afford everything you need and have a large enough savings account to cover unplanned emergencies.

There was a low point in my life where I couldn't even afford a $50 battery for my motorcycle, so for a few weeks I had to push start it while trying to save up $50. I was never able to save up that $50 so I finally gave in, got a credit card, and bought that battery. I also bought every everything else I had been deferring. Sure I racked up $10,000 debt very quickly, but then I got a great job, paid it back, and am fine now. If I hadn't done that, I'd have been push starting that motorcycle for months.

Granted, nobody needs a $1000 iPhone X, but I think someone can make a great case for how a smartphone is one of the most important things you can own, and stretching the payments over two years with no interest is a massively better alternative than slapping it on a credit card with high interest or even worse, a payday loan with crippling interest.