Best way to pay for sofa - outright or finance?

[holymaloney7]

Sofa is just over 2k from dfs who offer 0% finance. We have the money in savings but it's a big chunk to use up, last time we bought one we bought it outright but I'm not the best with things like this so wondering if it's best to just buy outright, or maybe pay 1k outright and the rest on finance over 2 years or something like that? It seems less of a big purchase but manageable payments monthly. What would you do?

I’d never put furniture on finance.

I'd use as much 0% finance as I could because that money could be earning you 5 or 6% in interest.

Always interest free finance if available.
Better you earn the interest on your savings and pay per month.

Always use the 0% if it means more money getting interesting your account.

Caveat: the finance counts as borrowing if you plan to remortgage…

Why? The finance is interest free, and that money could be earning 5% in interest elsewhere. It’s a no brainer.

Finance-why dip into savings if you don’t need to? (Obvs you will over time to pay the finance).

Finance. Why say no to hundreds of pounds!

If it’s 0% then I would finance it, just be aware that it will be classed as borrowing like any other loan so if you’re planning to remortgage it’ll be included as part of your outgoings for affordability calculations.

We always put big purchases like this on 0% finance if we can and keep the balance to cover it in a separate savings account should we need to pay it off for any reason. I currently have the money to cover £3k worth of white goods from Curry’s invested in premium bonds and they have made me £150 so far! The balance needs to be paid in November so I will just cash them in and pay it off then.

Why? If we paid 1k then we'd only have to pay around 40 a month which would not be very noticeable.

Well, do that then 🤷🏼‍♀️

Finance over cash for sure - as others have said then you can earn interest on your savings. We have a rewards credit card so put big purchases on that then pay it straight off - could be another option.

We always use 0% finance. The repayments over 3/4 years are so low you won’t even notice them and you’ll have the sofa far longer than you’ll be paying for it. Just be sure you could afford the repayments even if your circumstances changed.

We did part savings, part finance to keep the monthly amount down

This!

If £2k is a large amount for you, I wouldn’t actually spend that much at all on a sofa.

Look for a £1k sofa instead. Keep the £1k remaining for emergencies that might come up.

No it isn’t. It impacts your credit score - it works against you for borrowing. There’s more efficient ways like a 0% card.

A 0% card would also work against you for borrowing.

Well you know yourself best, so as long as your total borrowing is under control etc I would do it. Also bear in mind that it is taken into account when applying for a new mortgage etc.

We did it with a sofa from DFS 2 years ago and honestly we don't notice the £25 a month, meanwhile our savings remained untouched. The right decision for us.

I check my credit score monthly and it did not change when we bought our sofas on 0% finance and the same with the white goods I mentioned above (still 999/999).

So why question it? Just do that if you know that makes sense

It makes financial sense to use 0% offers when available. I always do. Recent one was my phone. Why would I pay £600 when I could pay £25 a month for 2 years? Far less significant to my cash flow and I can earn interest on the cash.

Where did I say 2k was a large amount for me? We have plenty more savings, I just wondered what most people do for expensive purchases if there is a 0% finance option. We always pay outright for things, hence no experience in finance. But 40 a month is nothing really. I don't know anywhere you'd find a half decent sofa for 1k, I wouldn't waste my time personally. 2k for a sofa seems very reasonable to me.

This. If 0% finance is available it’s a no brainer.

I'd go for finance purely for the extra element of protection. I joined a Facebook group recommended before I purchased my sofa as I was looking at DFS and a lot of people are having a lot of problems with long wait times, incorrect colors being delivered and not their usual quality. People in the group with finance agreements seem to have better outcomes when they have problems as they have another person on their side fighting to get issues rectified if anything is to go wrong.