The price of popular priced furniture today makes it difficult for the selling stores to make a sustainable business. As a result, some I want to say most, are making their business work by doing their own financing. Several retailers that I encounter explain that a $400 to $500 upholstered something when they finance easily ends up costing more than twice that amount.
Business changes just as the products they sell.
Purpose of comments is merely to paint the picture, I assume everything is within the respective marketing laws. Plus, consumers aren't obligated to participate. If one wants to judge, well they might need to be smarter. To add, manufacturers can only stay in business making what sells.
Doyle
It is common here in NY to provide financing and folks will buy as long as they can afford to pay slowly. They don't consider the total up charge just like young people don't think about credit card percentages.
I worked for a guy years ago who sold furniture and made his primary living off the financing more so than the cost of the furniture he sold. Two days a week were set aside for collection visits.
SA
I worked for a guy years ago who sold furniture and made his primary living off the financing more so than the cost of the furniture he sold. Two days a week were set aside for collection visits.
SA
I can believe that!
Stupid is as stupid does.
Buy the "same" piece furniture one time and pay your neighbor to "fix it up" when it gets tired, or buy/replace "about the same" piece furniture over and over because it's junk and breaks?
Time to start really hitting the retailers with the real price of what it costs to dispose of it all/the loss of meaningful work for skilled people... . Uh no, that would be a "tax" now, wouldn't it? mercy... couldn't possibly consider that... might be a "job killer". (scoff)
No easy answers, my friends.
Many furniture retailers don't handle their own financing. They sell the note at more than twice face value to a 3rd party lender. They get a huge mark-up right up front, and they don't have to go door-to-door breaking legs.
I am always shocked at people and financing. They go to buy furniture and never consider the loan carries finance charges similar to the mafia's Vig on a loan shark deal.
One of the biggest money makers for car dealers is on financing. Most people do not know that dealers get a 1 or 2 % kicker on the amount financed. It can be more if the dealer up's the interest rate. Many unsuspecting buyers head
into a car dealer and focus entirely on the monthly payment. Little do they know if they went to their own bank or better yet a credit union they could get it much cheaper.
A perfect example is my wife. The dealer wanted 5 % on her new car. She went to her credit union and got 2 %.
3 % on an expensive car over a period of 4 or 5 years is alot.
I myself HATE banks and financial institutions with a passion. The interest they are paying on money is at the lowest in history yet the interest they charge their customers is outrageous. Credit Card interest these days is criminal. My wife hates credit cards and banks with a passion as well so we always carry zero balance. We buy all of our supplies through Miami with a corporate credit card and then she reconciles the account at the end of the month and pays it back to zero. None of our credit cards carry a balance.
Furniture stores that I have seen finance through banks or mostly through finance companies. The interest rate is astronomical.
Chris
Badcock & Moore is the biggie around here. Even little Brandford (pop. 718) has a store. I guess revolving credit means every time you pay your loan down a little you can go in and buy something else and keep you account maxed out all the time. I know people who do this. Gotta have the latest flat screen. For only 23.9%.
Here is their attention getting ad.
Badcock has been granting credit to valuable customers for more than a century, so we're good at it. We make the decision right in the store, which makes it easy for you.
To make it even easier, you can apply for a regular In-House Badcock Revolving Credit Account online. Check it out, and see how easy it is to get what you want.
No Credit Refused
No interest if paid in full within 90 days (if 90-day Special Purchase Plan); 6 months (if 6-month Special Purchase Plan); or 12 months (if 12-month Special Purchase Plan) and other conditions are met. If the balance is not paid in full by the expiration of your Special Purchase Plan, or if any of the conditions below are not met, interest will be imposed from the transaction posting date at the Annual Percentage Rate (APR)* specified below and in the Badcock Easy Purchase Plan Addendum.
*North Carolina 18%; Alabama 21%†; Georgia, Mississippi and Tennessee 21%; Florida 23.9††; Virginia 21.9; South Carolina 24%.
And that was my point Ed. I can call Luigi in Detroit and get better rates. Of course if I missed a payment I may end up with a cast on my leg. :)
The interest rates these shysters charge are criminal. Especially considering the rates they are paying to get the money.
What are bank CD rates at now ? 2 - 3 % ? I hate banks........Almost as much as insurance companies. But thats another story. :)
Chris
Of of my customers told me once they made more profit selling protection plans than they did on furniture. I am conflicted because that is/was a large part of my business and for those that really needed it, it is a good choice. Like insurance, it's the principle of "Shared risk." All started centuries ago in a pub. One person could not weather a ship and load of cargo lost at sea. But if you get together 50 shipping owners, they can each take a share in the loss of any one. You can't accurately predict if your house is going to burn down next year, but those actuaries can tell you fairly accurately how many houses out of 100,000 are going to burn down next year in a given location.
The other scam is the "Rent-to-Own"
Went out today to do an "evaluation" for mfr. Sectional with two wedges and three armless chairs.
Chair #1
- corner of cushion collapsed
- frame inside broken
- 2" of thread hanging out on top-stitch right in center of seat
Chair #2
- corner of cushion collapsed
- cushion falling into spring area because only held in place by cord tying together coils
Chair #3
- Back frame broken and wobbling back and forth (consumer had a similar problem upon delivery and returned that one)
Wedges and ottomans were displaying early signs of cushion failure.
Oh, and it's 4 months old.
Where was it delivered to .... a college dorm ?
SA