The end of 0% Bike Shop finance?

pdid
pdid Posts: 1,065
edited February 2010 in MTB buying advice
Found this article on the commencal owners site:

http://www.commencalownersclub.com/inde ... 496.0.html

It seems that if you`re looking to get finance on a new bike then now is the time to do it. Black Horse finance, the company behind 90% of interest free bike shop deals, will be pulling the plug on 0% deals from the end of February 2010.

Comments

  • There`s plenty of credit cards still offering 0% though.
    (Just make sure you`re disciplined enough to pay off 1/12th of the total value over 12 months,though and make sure you pay it off within the interest free term)

    You don`t get a discount when using the bike shop`s finance deal,either.

    Worth seeing if your employer offers cycle to work,first aswell.

    That way its done as a salary sacrifice and you save up to 50%.
    2006 Giant XTC
    2010 Giant Defy Advanced
    2016 Boardman Pro 29er
    2016 Pinnacle Lithium 4
    2017 Canondale Supersix Evo
  • bomberesque
    bomberesque Posts: 1,701
    I'm sure someone will step into the breach, assuming there's money to be made that is

    IMO 0% finance is a wolf in sheep's clothing anyway. The title suggests you're getting something fro free, which if course you're not.

    I can get 3-5% loans from my bank unsecured and then take the commission (which if the article is correct, is upto 20% of the sale price :shock: ) as a discount. IF I were to borrow money to buy a bike ... which I wouldn't.
    Everything in moderation ... except beer
    Beer in moderation ... is a waste of beer

    If riding an XC race bike is like touching the trail,
    then riding a rigid singlespeed is like licking it
    ... or being punched by it, depending on the day
  • loltoride
    loltoride Posts: 460
    I am surprised it is used so much finance 10k yes but 2 -3k what’s the point , I understand not everyone is going to have that cash but you would expect most people to have that within a year. If not then I don’t think anyone who can’t should be spending so much money on a bike, if it was lucrative for lender then they would not be stopping.

    My advice if you can’t buy cash then save.
    So Far!
  • missmarple
    missmarple Posts: 1,980
    I could've sworn a majority of online bikeshops and IT shops made use of VI2 finance options, not Black Horse.....

    IMO, if you can't afford the bike without finance then you're stepping too far. Culture of Plastic will soon end I can assure you.
  • bails87
    bails87 Posts: 12,998
    Yeah, I agree. I can see the jusitification for something like a house or a car. Something that you need as opposed to just wanting. Personally, I'd only use a loan/finance for a house, because there's no way you can afford to buy one straight out. With cars you can at least buy a heap of junk to get you around while you save for something nicer. Same with bikes.
    MTB/CX

    "As I said last time, it won't happen again."
  • dave_hill
    dave_hill Posts: 3,877
    estevens wrote:
    I am surprised it is used so much finance 10k yes but 2 -3k what’s the point , I understand not everyone is going to have that cash but you would expect most people to have that within a year. If not then I don’t think anyone who can’t should be spending so much money on a bike, if it was lucrative for lender then they would not be stopping.

    My advice if you can’t buy cash then save.

    It's not always down to being able to afford it I know that it's the principle reason but I look at it this way - I can afford to buy bikes and so on and pay in one lump sum. However, I hardly ever do so for one reason and that is if I take £3000 out of my account now, then I lose the interest on it, even if it is only a tiny bit.

    If I pay in installments, then the money stays in my account earning me interest. Anything over £500 I look for 0% finance if at all possible.
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  • dave_hill
    dave_hill Posts: 3,877
    missmarple wrote:
    I could've sworn a majority of online bikeshops and IT shops made use of VI2 finance options, not Black Horse.....

    V12 don't do 0% finance - they do deferred payment schemes. It's a different beast altogether.

    0% Finance deals are paid off by direct debit over a fixed period. The payments are fixed amounts taken at an agreed poitn every month. Your responsibility is to ensure that there is enough in that account every month.

    Deferred payment schemes rely on YOU to control the payments - they make money by relying on the consumer NOT paying the loan off in the alloted time, then getting stung for upwards of 25% interest.
    Give a home to a retired Greyhound. Tia Greyhound Rescue
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  • bomberesque
    bomberesque Posts: 1,701
    Dave

    the conceit here is that the shop pays a fee to the finance company, if the linked article is to be believed then up to 20% of the sale price (although I expect that it's normally more like8-10% for 1 year credit) What they're doing is effectively paying the interest up front on your behalf. That is a fee that you should be able to negotiate off the sale price if you pay cash (OK, they probably wouldn't give you it all but still....)

    a private loan from the bank can be had for pennies these days and if you really look at how much interest you would get off that money in your account .... well....

    still, your choice just don't think you're getting something for nothing because (as usual) you're not.
    Everything in moderation ... except beer
    Beer in moderation ... is a waste of beer

    If riding an XC race bike is like touching the trail,
    then riding a rigid singlespeed is like licking it
    ... or being punched by it, depending on the day
  • bobcheese
    bobcheese Posts: 343
    I disagree with regards to using 'loans' to purchase bikes etc. IMO if you are smart about it then you can save yourself money AND get discount at the same time. As the spiderman says you can get 0% credit cards offering anything upto 12 months and some offering 0% 16 months for balance transfers (all be it with a 3% one off charge). I agree with finance deals via dealers will not be good value for money but to say borrowing to buy altogether is a no no I think is wrong. In some ways you have more protection if you buy a bike via a credit card especially when purchasing over the internet. Dave Hill hit the nail on the head with regards to being 'money wise'. £3000 in a savings account @ 3% will give you £90 interest in 12 months. Buy a bike on a 0% CC, make min payments for 11 months then the full lump sum in 12th month and the bike is another £90 cheaper.

    I think the moral of the story is its each to there own and as long as you make sure you get the BEST deal available to you then go for it.
  • loltoride
    loltoride Posts: 460
    bobcheese

    There are not much bike shops that will not give you a deal on paying cash and a lot more than £90. Call any of them and test out especially on special order or recently launched bikes, don’t take my word for it try it,
    So Far!
  • Anonymous
    Anonymous Posts: 79,667
    finance for a bike isnt a bad idea if you are going to keep the bike for longer than you are paying for it.

    this would never suit me.
  • GHill
    GHill Posts: 2,402
    finance for a bike isnt a bad idea if you are going to keep the bike for longer than you are paying for it.

    this would never suit me.

    Yeah, I don't think I've seen two week finance deals :lol:
  • Anonymous
    Anonymous Posts: 79,667
    GHill wrote:
    finance for a bike isnt a bad idea if you are going to keep the bike for longer than you are paying for it.

    this would never suit me.

    Yeah, I don't think I've seen two week finance deals :lol:

    very true.

    although im not buying any more bikes from now on. i'm finished. i'm satisfied. x does not = n+1: x = n
  • GHill
    GHill Posts: 2,402
    although im not buying any more bikes from now on. i'm finished. i'm satisfied. x does not = n+1: x = n

    :shock: Who are you and what have you done with the real sheepsteeth?
  • Anonymous
    Anonymous Posts: 79,667
    i might have to quote my own quote in my own signature just for posterity. :lol:

    but i mean it.
  • lawman
    lawman Posts: 6,868
    this has ruined my plans for a new bike :evil: not fookin happy at all about this as you can probably tell
  • lawman wrote:
    this has ruined my plans for a new bike :evil: not fookin happy at all about this as you can probably tell

    Just get it before next month. It's on credit anyway so it's not like you have to save up first.
  • weeksy59
    weeksy59 Posts: 2,606
    i was lucky with my Supr4. Every company i called wouldn't do 0% on discounted/sale bikes.

    I callled Evans and they were unsure "can you do it on a sale bike ?"

    "not sure, can't see why not"

    I imagine head office won't have been impressed but i got mine for £500 discount and 0%.
  • I had a similar thing with my Meta 552 at Evans. They had it on sale and I got them to discount down to price match the lowest internet price and then got 0% credit on it.

    The thing with Evans (and other big bike chains) is that they would have enough negotiating power to get a much better deal with the finance companies than the 20% quoted by the guy from Real Cycles in the article. Plus their purchase costs will be lower than your average retailer as they will be buying much higher volumes. That's why they can pretty much always afford to do better deals than your LBS.

    With Black Horse pulling out, Evans (and the like) are likely to be hit quite hard as I'd imagine the majority of their high value business comes from 0% deals - it was the only reason I bought from them and I know lots of people for whom that's also true. However, I'd also imagine that, due to their bargaining power, retailers like Evans will be able to secure 0% finance deals from other lenders so we may end up in a situation where the only option if you want 0% finance will be to buy from Evans et al. This could be another nail in the coffin of the LBS.
  • lawman
    lawman Posts: 6,868
    lawman wrote:
    this has ruined my plans for a new bike :evil: not fookin happy at all about this as you can probably tell

    Just get it before next month. It's on credit anyway so it's not like you have to save up first.

    could do i guess, wanted to put as big a deposit down as possible so the payments would be smaller, plus the bike i want costs nearly 3 grand so i still have abit of saving to do :(
  • I've got best of both worlds. got a 0% virgin credit card. 16 months 0% on balance transfers and cheques. Got them to do a transfer from the card into my bank account.

    So now I can buy a bike for cash (with a cash discount/haggle) and still have 16 moths 0% to pay for the lower cash price :P

    There is a handling fee for the trasfer but ist only 4% so £40 per £1000
  • I've just bought a road bike for commuting to work on 0% finance through my LBS. It was via Black Horse, so I'm relieved that I didn't delay the decision any longer (I have been considering the purchase for best part a year!) as I would have missed out.

    Although I can understand why some have stated that 0% is not a good idea, and I agree that saving up in advance is always the best route, it works very well for me. By buying my bike now, as opposed to saving up for twelve months (and probably longer once I've blown the savings on something else!), I can start riding to work immediately, thereby saving myself up to £30-40 pm in petrol costs. Given that my repayments are only £60 pm, this makes the bike extremely affordable; even the missus agreed on that point and I never thought she'd give her royal assent to me getting a road bike.