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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To think apart from mortgage it is possible to live debt free!?

660 replies

Moneytalkone · 10/01/2020 09:52

Just that really, AIBU to think that it is possible to live debt free, that debt isn’t a necessity in life! Apart from a mortgage I suppose if you want to own a house. Had a chat with a friend who claimed that debt is given these days, it’s almost an accepted/expected part of life? What do you think?

OP posts:

Alsohuman · 14/01/2020 14:03

You can’t buy cheaper if you buy outright, that’s utter nonsense. Nor can you forget to pay because you set up a direct debit. The tech argument is also nonsensical, whether you buy cash or on 0% finance, it still goes out of date at the same rate.

woodchuck99 · 14/01/2020 14:12

As well as 0% finance you can also buy the item with a credit card and then transfer to another credit card with 0% interest. Sometimes you need to pay a fee to do this but not always.

Oliversmumsarmy · 14/01/2020 14:18

You can shop around and save money on bills and still live life and do what you want.

I grew up with a family who were frightened of debt.

We always had to save up for something but by the time we had saved the moment had passed.

We spent too long saving for a house that didn’t have a mortgage.

If we wanted to go to the cinema to see something and it took more than one week to find the money then the movie wasn’t showing anymore and the money would go back into the family spending/saving.

It didn’t really do anything about teaching me to save up for things.

Oliversmumsarmy · 14/01/2020 14:21

How do you get your council tax cheaper if you pay upfront in cash

BarbaraofSeville · 14/01/2020 14:32

I don't think there are any prompt payment discounts available for council tax and the great tragedy is that the people who are forced to buy their gas and electricity in advance, usually because they don't have a lot of money or a good credit rating are actually charged more for it.

Those who take what is effectively the interest free credit buy now pay later option are charged less.

user1497207191 · 14/01/2020 15:16

You can’t buy cheaper if you buy outright, that’s utter nonsense.

No, you are talking nonsense. I bought my last car outright - I got a whopping 25% discount on the list price. It was marketed as interest free credit to buy, but that was based on list price - so I'd pay full price to get interest free.

Same with sofas etc. The display prices are nearly always a lot higher in the likes of the big warehouse places offering 0% credit. Go to a smaller independent furniture shop and you can get similar size/quality for a lot less. A few years ago, we wanted a G-plan sofa. It was priced at £2.5k in one of the warehouse retailers with 0% credit - our local independent had virtually the same item, G-plan but slightly different material pattern at £2k.

Alsohuman · 14/01/2020 15:37

But how much interest did you lose on the money that paid for your car? Independent shops are usually more expensive, it wasn’t the same sofa, was it?

user1497207191 · 14/01/2020 15:53

But how much interest did you lose on the money that paid for your car? Independent shops are usually more expensive, it wasn’t the same sofa, was it?

Savings interest for 3 years doesn't add up to 15%. Yes, it was the same sofa - same make, just a slightly different pattern. Manufacturers make slightly different variations all the time - sell one item to one shop and a very slightly different item to another so shops can con people into thinking they're different to justify different pricing. Someone is making money when 0% finance deals are offered - they're not doing it for the good of their health. Either the shop pays the finance firm out of a higher price or the finance firm is expecting/hoping for late payment fees.

woodchuck99 · 14/01/2020 15:57

The people getting 0% credit probably weren't paying the list price either though. Maybe not 25% off but I doubt they paid the full price. The interest free period is often not for the whole loan so they are relying on people eventually paying a higher rate. I have sometimes been quoted more if I paid the car outright rather than hire purchase too which is quite irritating.

Alsohuman · 14/01/2020 16:09

Someone is making money when 0% finance deals are offered - they're not doing it for the good of their health. Either the shop pays the finance firm out of a higher price or the finance firm is expecting/hoping for late payment fees

It’s a marketing tool to increase volume. If you asked for a discount instead of 0% finance they’d laugh at you. They may well be hoping for late payment fees but only stupid people pay those.

user1497207191 · 14/01/2020 16:16

If you asked for a discount instead of 0% finance they’d laugh at you.

Have you ever done it? No, thought not. I do it all the time. No they don't laugh at you. Sometimes they say no outright, sometimes they get the manager who may say no, or may offer a discount, sometimes the sales assistant themselves may offer a discount. Never once have I been laughed at. But many times, I've got a discount. Usually if they say no, I just go elsewhere - it's very rare that I just "have to have" something specific I see in a shop or showroom - there are usually plenty of alternatives and more flexible shop assistants/managers!

TabbyMumz · 14/01/2020 16:18

I'd rather the car was mine and paid for, then if you lose your job at some point, you dont have to worry about payments and losing the car.

user1497207191 · 14/01/2020 16:19

Maybe not 25% off but I doubt they paid the full price.

For the case in question, the 0% finance deal instalments added up virtually to the penny to the list price and they weren't for negotiating the monthly instalments and said it was fixed and there was no wriggle room. However, when it came to paying outright I not only haggled them down with the 25% discount, I also got free car mats, a tow bar and free proper spare tyre thrown in. (I also got a very good trade in price for the part exchange!).

woodchuck99 · 14/01/2020 16:28

(For the case in question, the 0% finance deal instalments added up virtually to the penny to the list price and they weren't for negotiating the monthly instalments and said it was fixed and there was no wriggle room.

It can be the other way around around though with hire purchase which is perhaps more common now than car loans. It all depends on the dealer I suppose.

VivaLeBeaver · 14/01/2020 16:56

I’ve asked for discount for paying cash and been refused every time. Mainly cars but also a sofa.

They want you to take the finance, car salespeople get a commission. They panic and try and talk you out of it. One time the sales person got the main manager in to give me a talking to and he tried to convince me I should keep my savings in the bank and pay them 7% interest.

VivaLeBeaver · 14/01/2020 16:57

Meant to say the car might not have been a 0% deal but the sofa was.

NemophilistRebel · 14/01/2020 17:06

I’ve asked plenty of times for discount for paying in full rather than finance

Sofas - no discount, only offered 0% finance

Cars - discount offered is more for finance purchases. Less likely to give favourable trade in against cash purchase

Appliances - no discount for bulk ordering but offered 0% finance

Alsohuman · 14/01/2020 17:07

I'd rather the car was mine and paid for, then if you lose your job at some point, you dont have to worry about payments and losing the car

We have 0% personal contracts for ours. No point in owning a depreciating asset and no worry about losing our jobs. We’re retired and our income’s assured for the rest of our lives.

NemophilistRebel · 14/01/2020 17:08

In fact the last t&c’s given on a financed car purchase said that if I withdrew from the finance within the 14 day cooling off period and instead paid in full the discount offered for the car would be revoked and I would have to repay the dealer contribution

Snowy111 · 14/01/2020 17:30

If you use carwow for new cars you get loads off for paying cash

NemophilistRebel · 14/01/2020 17:33

And carwow for financed cars gets you more off

Xenia · 14/01/2020 19:10

I always buy second hand cars and just prefer to pay cash. it just seems simpler and sometimes they last a very long time on volvo 17 years !!! with few repairs luckily) - if you are in it for that kind of long game and you buy second hand I am pretty sure it works out fine but everyone is different in how they feel about these things.

The main thing is not to get into such debt you are in a mess financially.

Twillow · 14/01/2020 19:16

Of course it is, and it should be. It's about living within your means, saving so you have money for the unexpected, not expecting to have everything now and new.
I tell my kids we can't have such and such until next month frequently.
Debt should be an exceptional, rather than a routine thing. Don't people realise how much interest costs them?

Alsohuman · 14/01/2020 20:04

Don't people realise how much interest costs them?

A lot of people seem not to. I was utterly gobstruck when it was revealed what the interest rate on payday loans were. I feel so sorry for people whose finances were in such a mess they had no choice but t take them.

JosefKeller · 14/01/2020 21:48

You can’t buy cheaper if you buy outright, that’s utter nonsense.

have you even tried?

Even if you don't, compare similar items - they tend to be cheaper in places where they don't offer you "o% interest". That's the big point you are missing.

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