Installment Buying

[Music] it was only a month ago that I moved into this office I took it over from all dr. Patterson when he retired just as I was ready to go into private practice the equipment I got was in good shape but one day after finishing my last appointment for the day I got to thinking about the first impression the waiting room gives for instance that's sofa would you like to sit on it they say appearance is one of a man's business assets I'd say that was a liability someone could get hurt I was beginning to give some thought to new furniture when that did it I decided to go down to see about some new furniture right away well I made my choice carefully pieces that were sturdy and comfortable but I didn't have enough ready cash how could I arrange to pay for this maybe on the installment plan huh rates were 6% a year so much down so much a month well the salesman started figuring three hundred and seventy dollars worth of furniture I could pay $100 down balance of two seventy at 6% Oh two six sixteen twenty charges our total of 286 twenty paid over nine months makes thirty one dollars and eighty cents a month so it would cost thirty one eighty a month for nine months how much for six months and for twelve I only figured 4770 for six months more than I wanted to pay every month and 2385 for twelve months to pay it up as soon as possible the nine months deal seemed best to me then the salesman handed me a conditional sales agreement this I'd have to sign to buy on installments what did all that fine print say title shall not passed a buyer with delivery of said personal property but shall remain vested in seller until entire purchase price is paid I wouldn't own the furniture until it was all paid for upon default by buyer in the payment of any installment of the price seller may without notice take possession of said personal property retaining all payments made thus far as recompense for handling costs I had heard jokes about repossessed furniture but this was serious if I missed one payment I was liable to lose the furniture and all the money I had paid up to then I wasn't so sure that this was easy credit I had heard about I was mighty discouraged next day I was still worried about the risk of repossession but I found that there are other things to consider in installment buying I was waiting for one of my patients mrs. Jerrod who was 20 minutes late I'm sorry I'm late dr. Harris oh that's all right mr. Gerard I haven't any watch you see last week when I lost my old one I went down to the jewelers and picked out a new one it was a beautiful watch but it was expensive so expensive that I couldn't well I couldn't pay cash for it so they worked out an installment plan but when I saw how much extra was going to cost me I asked myself is it worth buying on installments is having a watch now so important that I should pay more for it than if I buy it for cash so I decided to save every week until I could buy it for cash having a watch now isn't worth paying all next to charges now there's a question for me is having the furniture now worth paying extra for installments 16 dollars extra I could save that by buying it later for cash but is it safe trying to keep using this old furniture so I decided to look further into this matter of installment by about a week later I got another slant on things as I was saying doc you'll have to drop out to our new house it's kind of small not as big as the first one that mrs. Crain and I picked out we talked with the Realtors looked at the houses and picked out a beautiful home one that was just right for the family with a low down payment it seemed easy to buy but when we considered the monthly payments and tried to fit them in with our regular expenses we asked ourselves can we afford it we decided that buying the larger home would strain our budget for a long time by buying a slightly smaller house one that would suit us almost as well we're sure we can afford to meet the payments every month and not lose our house even when we have to pay your bill hey Doc well sir I don't think so there's another question I should ask myself can I afford it will I be able to fit the payments into my budget and meet them every month without fail I thought of that again when I called on bill hall at his home well doc if I'm going to be laid up it's a good thing if there's no radio to listen to but say did I have a time getting it you know I had to go to nearly half a dozen stores before I finally got good turns good turns why is there really so much difference difference sure there are lots of ways they configure most doors I went to quoted me 6% but a 6% carrying charge is far different than a true interest rate of 6% the way it figured out most were charging a true rate of about 12% and one tried to charge me almost 24% you've got to watch the way they figure check the time element in the contract if you want to be sure you're going to get the best installment terms that's why I shop around so there's a third question am I getting the best installment terms I decided to shop around too and see how much various places did charge during the next week I took time to investigate different sources of credit I checked a small loan company and a bank to see if they would lend me enough to pay cash for the furniture perhaps set a better true rate of interest I went around to different stores and found furniture prizes and quality much the same but when I checked finance costs and payments I found many differences when I had all the facts and figures put together I went back to my office to see how many dollars it would cost me to finance the same amount of money for the same length of time I figured in all the extra charges of some places credit investigation fees insurance charges and the cost of prepayment paying up early and here's how it looked that first stores installment charges were 16 dollars and 20 cents remember another store will charge me eighteen dollars and forty cents a third place read some figures off a chart that added up to twenty one thirty five places that required an endorser for my note I decided not to consider a fifth stores charges were twelve dollars and fifteen cents yes anyway I looked at it installment buying cost money so I asked myself again is it worth buying on installments do I need it badly enough now to pay the extra cost of installments or like like Florence garage that I save and buy it later for cash alright question number two can I afford it am I sure of being able to make the payments as they fall do or like the cranes should I be satisfied with something less expensive and finally question three am I getting the best installment terms have I checked enough credit sources so that like Bill Hall I know what I'm paying in relation to what can be worked out so I made up my mind and my answer to all three questions was yes as you'll see if you've been in my office lately well now people do have a nice place to wait I'm glad I bought it do you think I was wise if you had my problem what would you do