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Old 13th February 2024, 11:22   #41
SteveThackery
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Originally Posted by wraymond View Post
If a loan is made to buy something and the seller affirms the buyer will have nothing further to pay (such as in the adding of hire/purchase charges) then the periodic repayments of outstanding balance do not incur further charges unless he defaults. Then the buyer gets an 'interest free' loan. The fact that the purchase price is, well, ridiculous, it is to him at least, not a bad deal. The retail price seems market led and he is content. At the point of purchase, the loan is guaranteed to be interest free for the agreed term. It's sometimes called 'usury'.
So there IS such a thing as an interest-free loan, then. You've just agreed with another-clean-sheet.

I get what you are saying: the retail price is loaded such that the retailer can afford to offer interest-free finance. Your argument is that this loading is the equivalent of the interest the purchaser would pay if they had a normal loan-with-interest. In other words, the interest is simply added to the retail price up front. Then when you buy the product you are paying a price that includes the interest, even though it "feels" interest-free.

I do understand why you said "there is no such thing as an interest-free loan". Your point was that the interest is hidden by including it in with the retail price. Hence you still end up paying it. That is your argument.

Of course another-clean-sheet is actually correct: interest-free loans do exist in the form you've described above. Perhaps a better way to make your point is to say that "there is no such thing as free money", or "an interest-free loan doesn't save you money because the interest is lumped in with the higher price".

HOWEVER, don't forget that there is only one retail price, and it's the same whether you pay in cash or take out the "interest-free" loan. So compared to the guy who pays cash, someone who uses the loan does save money. Really it's the guy who pays cash who loses out: he pays the inflated retail price but doesn't get the benefit of spreading the payment over time.
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Old 13th February 2024, 12:03   #42
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So there IS such a thing as an interest-free loan, then. You've just agreed with another-clean-sheet.

I get what you are saying: the retail price is loaded such that the retailer can afford to offer interest-free finance. Your argument is that this loading is the equivalent of the interest the purchaser would pay if they had a normal loan-with-interest. In other words, the interest is simply added to the retail price up front. Then when you buy the product you are paying a price that includes the interest, even though it "feels" interest-free.

I do understand why you said "there is no such thing as an interest-free loan". Your point was that the interest is hidden by including it in with the retail price. Hence you still end up paying it. That is your argument.

Of course another-clean-sheet is actually correct: interest-free loans do exist in the form you've described above. Perhaps a better way to make your point is to say that "there is no such thing as free money", or "an interest-free loan doesn't save you money because the interest is lumped in with the higher price".

HOWEVER, don't forget that there is only one retail price, and it's the same whether you pay in cash or take out the "interest-free" loan. So compared to the guy who pays cash, someone who uses the loan does save money. Really it's the guy who pays cash who loses out: he pays the inflated retail price but doesn't get the benefit of spreading the payment over time.

Agreed. Well said
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Old 13th February 2024, 12:53   #43
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Default Woah, woah.

Let's not bicker about who's right and who's wrong- whether a loan is interest free or has interest compounded.... this is a friendly group of like minded car enthusiasts. The rest is just details.

And unless you get a private message from johnny talking balls then you haven't really hit the spot.
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Old 13th February 2024, 16:47   #44
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And unless you get a private message from johnny talking balls then you haven't really hit the spot.
I'm afraid I've no idea what this means.
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Old 13th February 2024, 16:56   #45
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I don't think there's any unfriendly comments here. Just different views. And who the heck is Johnny TB?
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Old 14th February 2024, 07:19   #46
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Agreed. Well said
The post quoted couldn't be faulted.

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I'm afraid I've no idea what this means.
If / when you recieve a PM for your efforts then please let us know.

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I don't think there's any unfriendly comments here. Just different views. And who the heck is Johnny TB?
Unfriendliness?
What does shoe size have to do with anything?
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Old 14th February 2024, 09:23   #47
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Just a polite reference to your post 33, although you have not responded to the questions it aroused! When 'shoes' comes to mind, it smacks of cobblers!
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Old 14th February 2024, 10:40   #48
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Hi Mike. Can I give you a quote:- you get nothing for nothing. Have you seen all these adverts on the television advertising ‘life insurance’ ? They tell you in some cases that you get a £50-100 or the latest I have seen £150 voucher to spend. Do you really think you are getting it for nowt? This is classed as a ‘loan’ to you, and if you take it up, you are paying interest on it for as long as you live. Now that is what I call a scam.But people fall for it all the time. You know why? Because they are idiots who have no understanding or financial acumen. But all they do is make other people richer by default.
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Old 14th February 2024, 10:47   #49
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Hi Mike. Can I give you a quote:- you get nothing for nothing. Have you seen all these adverts on the television advertising ‘life insurance’ ? They tell you in some cases that you get a £50-100 or the latest I have seen £150 voucher to spend. Do you really think you are getting it for nowt? This is classed as a ‘loan’ to you, and if you take it up, you are paying interest on it for as long as you live. Now that is what I call a scam.But people fall for it all the time. You know why? Because they are idiots who have no understanding or financial acumen. But all they do is make other people richer by default.

I am not that thick.
This discussion on interest free loans was started about buying cars but could easily have been buying anything retail - washing machine, furniture, kitchens etc which was well decribed by SteveThackery in #41
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Old 14th February 2024, 13:20   #50
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I am not that thick.
.......

Some would say that this explains why you do not own/drive an EV.

I on the other hand come from a family of scientists and engineers who are so thick and gullible that one of them is now on his second top-end EV. Not only that, he absolutely loves owning and driving it.

To make matters worse, I am considring an I Pace to sit alongside the XF-S.

I am of course applying the wisdom underpinning posts from the few regular posters about EVs and their gullible owners who, despite being early adopters of EV technology and obviously reasonably successful in life for being able to afford to do so, clearly are devoid of major intellectual faculties. It is implied. Otherwise they would follow the example of the wise who have the knowledge from a distrance and ignore the experience of many that comes from ownership.
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