Are you paying too much for household items?

Are you paying too much for household items?  New research from the End Child Poverty coalition has found that families using rent-to-own (also known as weekly payment stores) are paying as much as three times as much for key household items compared to purchasing up front from a high street retailer.

The report highlights just how much rent-to-own prices can be – £1090 for a cooker, £1560 for a washing machine.  Overall a list of 10 common items for the home, including a TV, sofa and fridge cost £9132 – three times (or more than £6000) more than purchasing a similar list of ten items up front from a high street online retailer.

If you aren’t able to purchase items up front, a FAIRshare loan could save you money. In August we discovered you could save almost £2000 when buying a Smart TV with a FAIRshare loan, compared to purchasing from a weekly payment store.

So if you aren’t able to pay upfront, are you paying too much for household items?  Let’s look at 2 essential household items, a cooker and a washing machine and see if there’s an affordable alternative to rent-to-own?  Read on to see how a FAIRshare loan could save more than £700 on these 2 items.

Cooker

The Beko BDVG592S Gas Cooker with Gas Grill in silver is available from Payweeklystore.com at a cost of £12.15 a week for 52 weeks (and a £25 deposit). The cash price is £525 (including £25 deposit), so with the 80.0% advertised Representative APR, the total payable will be £656.80.

The same Cooker is advertised on the Coop Electrical website for £299.00 plus £3.99 delivery, making a total price of £302.99.  So if you apply for a FAIRshare loan, how much would this cost?

A FAIRshare loan for £303, repaid over 52 weeks costs £6.94 a week, and FAIRshare requires you to save as well, ideally £2 each week for this loan.  The total repayable is £360.95 (APR 42.6%).  That’s £295.85 less than Payweeklystore.com and when the loan’s repaid you’ll have savings with FAIRshare of £104 too!

And because FAIRshare loans are flexible, you could save even more money!  For example, if you can afford the Payweeklystore.com weekly repayment of £12.15, you could repay your FAIRshare loan in just 34 weeks, and save even more money.  By paying £12.15 a week to FAIRshare (£10.15 loan repayment & £2 into savings) the total repayable is £339.98 (42.6% APR).  That’s £316.82 less than Payweeklystore.com, AND you”ll have savings of £68 in your FAIRshare account too.

Washing Machine

The Samsung 9kg AddWash Washing Machine Inox, is available from BrightHouse at a cost of £10 a week for 156 weeks, that’s 3 years.  The cash price is £730.01 plus £55 delivery and installation, so with the 69.9% advertised Annual Fixed Interest Rate/Representative APR, the total payable will be £1560.00.

The same Washing Machine is advertised on the John Lewis website for £669 with free delivery.  So what would this cost if purchased with a loan from FAIRshare?

A FAIRshare loan for £669, repaid over 156 weeks costs £6.98 a week, and FAIRshare requires you to save £3 each week as well.  The total repayable is £1089.53 (APR 42.6%).  That’s £470.47 less than Brighthouse and when the loan’s repaid you’ll have savings with FAIRshare of £468 too!  And remember, a FAIRshare loan is flexible, so you can choose repayments to save your budget, and perhaps save even more.

So are you paying too much for household items?  If you purchase from a rent-to-own store, then the answer is probably yes.

How to apply for a FAIRshare loan

You can apply online, or complete a paper application form.  FAIRshare will only lend what you can afford, so asks for details of you income and expenditure on the loan application, and will also need 2 months up to date bank statements before the loan can be assessed.  Yes, its a little more work, and it can take a few days to get a decision, but you can save £100s compared to rent-to-own.  Go on, apply today!

Price comparisons taken from payweeklystore.com, brighthouse.co.uk, electrical.coop.co.uk and  johnlewis.com on 16/11/17.

Representative Example –

Borrowing £1200 over 156 weeks will cost £12.52 a week + £3 a week savings – £15.52 including savings.
Total amount repayable is £1954.37 which includes interest at 42.6% APR (3% per month). Comparable Rate of Interest for true cost of borrowing 21.1%.
Total savings £468 after 156 weeks.