A lot of window companies are offering finance as one of their payment methods now. Even the smaller firms are offering it, finance isn’t reserved for the biggest in our industry any more. But the firm I work doesn’t do it. We did offer it for a very short time, but then stopped. Here are the reasons why…
When we started to offer finance, we thought there would be more interest for that option. The reason why we started to offer it in the first place was because we were getting more and more requests for finance. So we had a meeting and said that we would start to offer it. As soon as we got the package set up, the requests stopped! Sods law!
The other reason was the quite hefty interest rate that came with the loans. By the time the finance deal was finished and the repayments were made, quite often the amount paid for the windows would be double what it was if a person was to pay up front for it. An example today on BBC 2 with Don’t Get Done Get Dom showed Anglian’s finance package. They offered a customer a house full of windows and doors for £7500. They gave them a discount to bring it down to £6000 if they took their finance deal, but by the end of the package they would have paid over £15,000 over ten years for them! On that basis alone, we just weren’t keen at all on finance.
So that, on top of very little demand for it, it just wasn’t viable for us to be offering it. Just about everyone who goes ahead with us is happy to pay a deposit up front and then the rest on completion. They avoid massive interest charges and it gets the whole process of having the windows replaced in a matter of weeks and can get back to normal proceedings.
For bigger companies this is obviously an option that has to be available, but for a once office company like ourselves, this isn’t necessary.
We stopped offering finance about 15 years ago and I can honestly say it has never lost us a job. The 10 year repayment schedule will always mean you pay back at least double the original contract price.
local firms offers 6 months and 12 months interest free credit. the reps increase the cost to cover the finance on those deals, seems a bit dishonest to me
This is a big issue for us and we wouldn’t be able to operate on the same scale without providing credit facilities. I would say around half our orders are subject to them. Unfortunately. they’re mainly interest free with subsidies ranging from around 3% to a huge 14% depending on the package which makes a huge hole in our profits. In real terms, the subsidy costs are higher than this as it is charged on the amount borrowed INCLUDING VAT (which of course isn’t even our’s). We’re NOT allowed to credit the subsidy deduction to reclaim the VAT either. It… Read more »
re anglian the customer gets a discount for using finance as anglian get a good kick back a customer can settle after 12months to keep the discount given so re the int would be know were the figures you state if you work lots of passive leads finance its not as important ,active leads and finance work like hand and glove i would be lost without barclays finance you keep control of sale bring jobs forward rates are low too and helps you to get the order sales people who sell high volume in all types of direct selling use… Read more »
In days gone by I was a real finance animal, over 90% of the business I sold was on finance. Now we don’t even have a finance package, one of our competitors SEHBAC are pushing buy now pay later, interest free finance, I have lost a couple of deals over the past six months to them on this option, not only were they offering interest free, they were 10% cheaper than us as well. Given the subsidy they had to pay and the overheads they have and the low prices they are selling at, good luck to them, I just… Read more »
Correction – I said around half our orders where subject to finance but I checked this yesterday over the last 7 months and its exactly 25% at present. Obviously there will be a percentage of that 25% that we would have sold anyway, even if we didn’t offer finance. How much, I can’t measure, but we absorb the subsidy costs on that whole 25% of course. Our subsidy costs last year totalled £80K which makes a pretty big hole in profits. I always wonder if the company benefits from selling interest free finance, I know our sales people do but… Read more »