Motorola Financing

[xeene]

Most people with financing troubles don't think like this. They think hey this 600$ device now only costs me $30 a month, I don't have $600 to buy it but I think I can scrap around for $30. Only later to get shell shocked for $30 month after month when they forget about it. I know plenty who buy these phones and then ask to borrow $10 for gas.

But I agree, this is a good move for moto business.

 

[kodiak799]

Why would it be fiscally irresponsible to use Motorola's money for 18 months?

It's not, but it's also not enough money to make a difference if you have saved any real amount of money at all. It makes sense to finance a car or house, but people who can afford it don't bother with financing phones, tv's, furniture, etc..Really very little utility from spreading out a $500-$1000 expenditure over 12-18 months.

Also, such "good deals" are typically very punitive if your payments aren't on time to the day.

 

[kodiak799]

I would say just the opposite is the case. Anyone familiar with the time value of money knows that $100 18 months from now is worth less than $100 today. A no - interest loan is a no-brainer.

Buy a $600 phone. Divide $600 by 17 (to make SURE it's paid off in 18 months), and set up an auto-payment for that amount each month.

I would do a car no-interest loan - even if I had the cash in the bank. I would do a furniture or appliance no-interest loan - even if I had the cash in my pocket. THAT is using your money wisely.

While mostly correct, it's not enough money to make a difference (vs. a car loan or mortgage). Also $600 is $600 whether today or 18 months from now. Where the time value of money comes in is the RETURN you can earn on that money over 18 months, and savings rates are basically 0 today. In the past, or in good equity markets (which carries risk), you could do better, but $30-$50 after tax, while frugal and responsible, is trivial to someone who can afford to buy the phone outright.

Such programs really are targeted at people who can't afford the phone. It's exploitative - it encourages and enables people to live beyond their means.

 

[TatDroid]

it's also not enough money to make a difference if you have saved any real amount of money at all.

Exactly. If I saw a $5 bill laying on the ground I wouldn't be bothered to pick it up. It's not enough to make a difference.

 

[SFGate]

Although just another way to snag even more customers, it is a good thing for those who can benefit from it.

 

[pc747]

It's not, but it's also not enough money to make a difference if you have saved any real amount of money at all. It makes sense to finance a car or house, but people who can afford it don't bother with financing phones, tv's, furniture, etc..Really very little utility from spreading out a $500-$1000 expenditure over 12-18 months.

Also, such "good deals" are typically very punitive if your payments aren't on time to the day.

good point plus if you do not pay it off the apr shoots up to like 28.99% (https://motorola-global-portal.cust...38072/1384799980/redirect/1/filename/FAQs.pdf)

the thing about financing is we do it so we can have it now where if we save up and pay cash we get it while avoiding fees and and rates shooting up. Again that is my viewpoint but if someone was to put $300 down (the amount you would pay for a phone on contract with your carrier) if you paid $100 a month you will have the phone paid off and will not be under contract with your carrier. The exception though is that if you are on vzw and you do not have unlimited data it almost defeats the purpose vs buying an unlocked phone like a nexus and having the freedom to use it on several carriers.

 

[jroc]

VERY nice. This is the kind of thing I'd use. To the people saying its irresponsible to finance a phone, why? A phone is something I'm going to have for a rather indefinite period of time. Why dump $600 down on a phone when you can pay it off slowly? Not only that, but for young people its a good way to build a little bit of credit. Also you don't have to take 18 months to pay the phone off. You can pay it off in 6 months. Spread the cost out a bit. I think its a smart move and I see the rest of the companies following right behind them too.

Exactly. Its a double edge sword tho because if you are denied...that affects your credit report too. I am still amazed that no credit = bad credit. When I was in the situation of establishing credit for the first time many years ago...I had to go the Rent A Center route. I dont know if its thats easy today.

The APR is real high for this Moto financing tho....