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Obviously a total rip-off, right?

If I was buying a sofa, let's say, then maybe I would rather pay in instalments and might be prepared to pay a reasonable rate of interest. If I knew what the rate was, I could make a decision on how much to pay up front and how much to borrow over how long to suit my needs.

However, when I do look at buying a sofa, I get offered "0% finance" which sounds too good to be true, and so most probably is. I don't know anything about how these shitty swindles work, but I'm guessing it's something like this:

The sofa company borrows the money off the finance company at a wopping rate and puts it all on the cost of the sofa. So then everyone buying a sofa is paying the wopping rate, and if you pay for it up front, then you just save the sofa company a couple of hundred of quid or whatever that they would otherwise have paid in interest. And so the rate at which the hapless customer is borrowing at is totally hidden from view behind the cost of the sofa at it's brilliant "winter sale discount".

What a crock of shit.

I do need a new sofa though, so I'm guessing that I'd get much better value for money if I bought it from somewhere that doesn't offer "0% finance", just charges you for the actual cost of the sofa, and took out a loan if necessary (or better, put it on a credit card offering 0% for a bit and paid it off before the interest kicked in).

Is this right, or have I totally misunderstood?

Like you, I understand little about economics, and even less about scams like this, if it is one. I've just looked at the place we recently bought our sofa --Loaf.com, and very nice it is too -- and on their finance bit they have this:

Find Out More About Slow Finance

We could have offered some gimmick like "0% Free Finance" and hidden the real cost by hiking up our prices. But that's just not our jam. So we simply charge you exactly what it costs us. Which is a promotional rate of 9.9% courtesy of the people at Klarna. And you can pay for your squishy stuff at the speed that suits you. We don't take deposits up front. And you'll only start repayments on items after they are successfully delivered.

Sounds good, but maybe it's a con within a scam within a ripoff. Who know these days. The term "slow finance" immediately makes me suspicious, only one step away from "wild finance".

Or just buy second hand, we've picked up some immaculate furniture off Facebook for next to nothing

Possibly misunderstood. Its a way of them just making sales in a competitive market and to keep their factories making sofas.Having a flow of work makes there production processes more efficient. Its a bit like car sales.

Just be wary of  admin fees.

In this day and age I doubt you will get a discount for cash.

These days I do not bother but when had young family could be useful means of financing things.

The important thing is not to breach the loan terms...as then you will be hit with high interest rates.Thats when they make a killing

Thought about it - that's definitely the cheapest way, but I've got quite specific requirements and delivery is an issue.

I have a vague recollection that some of the 0% "deal" is limited term say maybe 12 months but the payments are structured to pay it off over say 36 months - so at the end of 12 you have the option of paying off the remaining lump sum or being put on the rack interest rate whatever that may be at the time (19%, 29%, who knows). So the "0%" is paid for by the finance company (and they may even bung the furnisher a few quid as an incentive to sell it) but basically acts as lure to sucker people into slipping onto the rack rate at the end. I think it was a car salesman explained this to me - basically there is no discount for buying in full in cash because they lose their kick-back from the finance company if they do so

The alternative is where they really do offer 0% over 36 or 48 months and therefore the price of the finance has to be hidden in the cost of the sofa, because it cannot be free

Read the small print and take your pick. I would assume the most "honest" prices would be those that don't offer 0% finance, so maybe non-chain furniture stores. But I don't know

My problem is that it's taking out a load with a finance company, not the sofa company. If they were offering finance themselves to keep the orders flowing, then that would be brilliant and honest.

But the finance company isn't lending it for free, is it? And I don't know what the rate is, so I'm foolish to borrow from them, no?

Obviously the cost of finance is in the cost of the product but do your homework.

Can you get the same sofa or one of comparable quality cheaper somewhere else?

I got a hot tub in 2019 on interest free, it cost less with company A on interest free than the same one as a one off payment from 3 other companies. Only about £50 or so but if 3 places are doing it for £3k and one is £2,950 and offering interest free why wouldn't you take it. 

It could be that the sofa company owns the finance company.

The finance company makes the killing on late payers, when they charge high rates.Its surprising how many become late payers and the finance company will know the approx numbers and figure out their returns accordingly.

The trick on these deals is not to get into that mess. Otherwise it really is a useful cash flow tool for the savy buyer.

Once got a Liberty sofa on such a deal.... superb.

I think generally the catch is that it is interest free for 12 months, but there is nothing sent to remind you that the 12 months is up, so you forget and don't pay up. Then automatically you get put on a heavy interest rate for the remainder of the term. You can do it if you are good with admin and make a note of when to pay it back.

The thing I've looked at isn't 0% for a bit, then the whopping rate, it's 0% for basically as long as you like - it's got be interest at an unknown rate in the price of the sofa.

It's just not honest enough for me, I'd much rather buy something at its face value, and if I can't afford it, I can either save up or borrow under transparent terms.

They don't in the case I'm looking at. It's DFS and Hitachi Finance.

Maybe - but without knowing what the interest rate is, I am not borrowing off that lender. 

Depends what the upholstery is. I bought a pair of big leather armchairs off the hospice furniture place in Kendal and they're perfect. But fabric ones I'm a bit funny about, like I'd buy a second-hand shirt but never underwear. I think that if finances permit it, it's way nicer buying fabric sofas new, while leather ones are almost better secondhand, as they're worn in, scuffed, soft.

It can be free to you. It all depends on the wording in the contract. I’ve done that for 12 mths and last time it was free - the product was the same cost with or without the 0% finance. The “catch” is you must follow the wording exactly to get the interest free loan eg any late payment could start charges and this could be back dated to start of agreement, or a high interest rate is payable from the end of the (usually short) 0% period which can often roll over to a longer period (say 3-5 years) if you use it, etc.

Any and all charges, payment dates, interest rates payable on defaulting at end of free period, etc. have to be in the agreement.

Really, it is no different from 0% credit card offers.

Due diligence - check out the finance company behind it is legit and registered to lend in the UK, and read the T&Cs carefully.

Sure, on "0% for a bit" deals. The one I'm talking about 0% for as long as you like, all the cost is in the product. 

Since they can't even deliver it for months, in that time I can save up and buy in cash from a more honest trader. 

Does it give a particularly different outcome? The sofa company gets a mix of lump sum payments from the customers and lump sum payments from the financing company, the same as if it were doing all the financing directly and borrowing money at the far end to meet the cash requirements of actually making the sofas (since there’s a single point in time cost to making a sofa, I’d expect somewhere along the line under any scenario the “0% interest” stream of payments is being swapped for a lump sum to match inflows and outflows).

You’d have to be regulated under some form or another to act as a finance company, so it would invariably be a different legal entity from the one that actually makes the sofas. And whether a sofa business thinks it also wants to get into the world of finance, or just pay someone third party to handle that bit, will vary from place to place - some places might want to keep it all in house, some places may just want to specialise in making sofas.

If you mean you don’t know what margin the sofa company is making on the ones bought up front versus those bought on the drip, then yeah, sure. But since you know what you’re actually going to pay, and you can compare that with the alternative prices for the thing you want, I’m not sure that needs to be a blocker - you don’t know what most people make as a profit margin on the stuff they sell…..

It’s very unlikely to be “for as long as you like”; either the retailer is b*ll sh*tting deliberately or through ignorance to get a sale, or will have some clause which is important. C/W 0% overdraft for as long as you have a current account in exchange for monthly payments into account and your loyalty.

No matter what you are entitled to see the T&Cs before you sign - you often have to ask the finance company direct rather than the retailer.

Not quite finance but my dad just went and got a sofa from one of these big DFS type places - got a discount down to £1200 before Xmas. He asked would it come down in their inevitable sales and they promised to match it  if it did (because of course at those kind of places you can't just buy a sofa and walk out like at Ikea, you have to wait three months to have it built).

Turns out in the January 'sale' the sofa had gone up to £1400 so they could put it in the 'sale' at £1300!??!

We buy our sofas from Ikea now, although we also still have two sofas we bought from DFS (or something) in 2001. They need re-upholstering (many cats and dogs over the years) but are still going strong and will make a good 'den' sofa.

OK yes, that's a fair way to think about it.

Obviously I can't buy exactly the same sofa from somewhere else and I don't know how any given sofa will perform until I've sat on it for 5 years or whatever, so the information available is poor. 

The way I'm thinking about it is: would I rather buy a sofa at what I consider to be a reasonable price, giving the money to the sofa company, or do I want to take out finance from a company I didn't choose under conditions that are opaque to me, in the knowledge that I'm funding all of their overheads as well as everything the sofa company does?

Even if by smoothing out their cashflow and achieving economies of scale etc by offering the shady "0% finance" they do manage to produce a good value product, rather than the same as anyone else but with additional costs the finance company creams off (including all their overheads), then I'd still much rather just deal straightforwardly with transparent costs.

I've made my mind up.

Really interesting hearing others' views on this, it has made me think about what actually matters to me when spending money, so thanks!

My exaggeration. You can put down whatever you like up front and pay the rest over up to 36 months I think. No change in price. 

DFS 's business model is on these sort deals. They have their own manufacturing places etc.Hitachi Finance do alot of these sort of deals with other organisations.They will have figured out that its better to wrap more sales into such deals etc. Paying upfront is not what most people do so they take that option out of their pricing structure, so sales people at the shop cannot negotiate.

These days on consumer credit, DFS etc have to be careful. So as long as you understand and read the agreement you will be OK.

You rarely see a bad word about DFS( unlike some companies on buy now pay later schemes), although I am sure there are poor reviews somewhere.Its a well known company and been around for a long time.

Bear in mind their sofas will be targeting at the "last for 3-5 years and then swop over consumer".

Never easy, I do not like these deals and am wary of them. But they can be useful.

Another way of thinking about it is that the person paying up front is generating a bit more profit, which allows the people paying on the drip to generate a bit less, and the combination allows the sofa company to sell more sofas. Some of the people buying on the drip do so because they don’t have the lump sum, and they get a ”0% loan” from the finance company, rather than having to take out a personal loan for it, because in effect you’re paying for some of it via the cross subsidy.

at the end of the day if you think it’s a fair price then that’s what matters, although in some ways I could understand the view that you’d prefer to give the money to the sofa company if it were some sort of bespoke sofa maker or independent retailer rather than DfS!

Good point. I'm much more of a "buy what I can afford, and wear it out until it is absolutely completely shagged and I desperately need a new one" kinda guy. I do the same with cars - if it's still got 4 wheels it's too soon to change it. 

Yes. If I really needed the finance, it would be useful. But I've got the option of paying cash, not having another direct debit, and doing business in a way I find more agreeable.

Ok. That’s often the way as it covers a wider range of buyers and what they can afford; just check the T&Cs very carefully. You have to make up your mind if you want to borrow from that finance company behind it (with all the clauses in the T&Cs that you may accidentally default on (cheque delayed in post thus triggering huge % from day 1 was an old one)) and get “caught out” with default penalties which make the money or “borrow” elsewhere (could be your own savings).

Some folk can’t justify too many credit applications so have to avoid, whilst others can benefit their credit rating by borrowing more (as long as they never default). Last time I did it, it was free loan for 12 months so helped my cash flow. The terms were specific to follow and roughly were to pay £x every 3 mths and the final payment “had” to be before a stated end date.

Sure, again, that's a fair way of looking it. My problem is with the finance company - why should I fund them when I'm being told I'm getting "0% finance"? It's not honest.

Yes, I'm shopping elsewhere where there is no "0% finance" bollox. Not some luxury local materials upholsterer mind you, I'm not Carrie Johnson!

Sounds like the Estate Agents advertising that they will sell your house for no fee. What's that all about?

Nothing is free in business life is it?

If you were paying 4%, you’ve still no idea how well that matches the commercial arrangement between the financing company and the sofa company, since you can’t know how much the sofa company gets compared to the list price on which you pay interest.

On one hand it’s opaque, but on the other hand you can see where the financing firm fits in here, whereas if DFS were doing it all in house you’d have no idea who was actually financing it further down the chain or what sort of cut they were taking for it.

My experience - DFS - we moved house and got a nice new sofa from DFS, you could pick the length of the interest free finance and it just went out by direct debit. For me - the catch was that they're pretty much selling you the "cost per month" as the price, "look it's only £50 quid a month for all this sofa and arm chair etc. made exactly to measure to fit in your space" (ahem ahem and that's £2.5k over 4 years) < that was the catch, we were just totally blaise about the total cost. Don't get me wrong - the sofa has been and is lovely, comfortable, and literally made to measure to fit into our living room perfectly (it was modular). 

However, I felt pretty stung when our friends showed us their two new sofas (I'm sure they were DFS as well) that were display models that they got for £700 in total for the two. At that point I was just like - naah never doing that again. So my hope now is, as others have said, to try and get off facebook second hand or ebay, or ex-display, where ever I can, and ideally save 60-75%.

In terms of them being scandalous and ripping us off, it was just a direct debit for 48 months then it stopped bang on the right time and they sent us a nice annual and closing statement, no problems whatsoever.

Basically if you want a sofa from DFS specifically it makes no economic sense to pay upfront because you're losing all that cost of capital straight away (in purest terms)* That is, if you are confident you can afford it for 48 months. I'm not even sure it showed up on our credit file to be honest, we did a mortgage renewal and various other credit checks in that time and I don't remember it ever being an issue.

"why wouldn't you take it?"

Faff?

Objections to propping up a non-productive credit "industry" that is parasitic on true production and is the source of much misery?

I could come up with other objections but I feel those will do for now!

Getting traffic on the websites.....

Well its kept DFS going for a long time .........so  I am not sure its "unproductive".Just finance.

Just be dispationate about it and look at is as a disciplined finance decision.

I've bought a few things on 0% credit. A couple of bikes spring to mind. I think some people are in the position were they can spare £50 a month, but don't have £1000 lying around. 

Even if you do have £1000 lying around, it's better to make that money work for you and take the 0% than it is to spend it.

Often it's the companies that bear the risk, not the financers. I imagine they do it to attract sales and improve turnover. 

If you make 10% profit selling something in cash, you might accept 8% for a certain % uplift in sales via finance. I don't think it's rocket science and I don't think it's shady.

Credit is the thing that makes the economy productive. No one saves up to open a factory, a warehouse, or many other kinds of businesses. They get them financed. See Dragons Den for evidence. 

0% credit is ace, why spend your own money when you can spend someone else's. Not so good nowadays with the savings rate so low though. But as long as you keep on top of payments for the credit and you pay off the debt before the end date, your own money that you would have used to buy the item, has at least been making "some" money in the bank.

Bit of a tangent (sorry) but I thought this might interest you..

If you think 0% finance on a new sofa might have some hidden pitfalls (I share your suspicions) - how about signing up to a 0% 'buy now pay later' deal on a big bag of sweets and a bottle of gin?  How about ordering a pizza delivery that it's going to take you a month and a half to pay off?

https://www.theguardian.com/money/2022/jan/29/buy-now-pay-later-grocery-sch...

Here's a little quote I've copy/pasted from Flava's website ("the buy now pay later supermarket"):

"Affordable online Grocery Shopping No Credit Checks!

That's right! Get your shopping direct to your door, without the huge costs of a traditional shopping supermarket

Unlike other Food Supermarkets, Flava looks at your Credit Future not your credit past."

the mark up on sofas is huge, a few bits of wood, nail gunned together, foam, fabric, cushions... your £500 sofa is costing them £100-200, they can afford to pay 12months interest on £500 when they make £300+... sofa wears out in no time at all, repeat the cycle.

Prices of products rarely, if ever, match the cost of manufacture.  Is the sofa what you want at a price you are happy with ?  How the retailers choses to try to make a profit and remain competitive is (providing they aren't being dishonest) their call, surely ?

Ok, can't do much about your specific requirements so if you have to buy new, fair enough but to address the delivery point: we bought a lovely sofa second hand and paid a "man with a van" to go and get it. He came back gushing about the amazing mansion he'd just picked it up from! There are some very wealthy people selling some very nice stuff second hand and for not a lot of money. It was a ridiculous bargain even with the cost of paying someone else to get it. Good condition too, which our cat has since addressed but it wasn't brand new so we don't mind too much!

How do you feel about buying from a company that has a bank loan and is factoring the interest payments in the pricing of their goods?

Fine because I expect its being lent at a cost effective rate in comparison with the personal loan, and the sofa couldn't be made without that loan. 

The point is that I'm paying the interest on a personal loan at an unknown rate, when I never even asked for the loan, and even if I choose not to take it. Con!

OT sorry

I made my own, Oak for the frame and arms and foam from a local foam supplier, covers made from various materials over the years. It's lasted over ten years of kids and dogs jumping all over it and is aging nicely. Bespoke to fit the room and matches the oak bookshelves I also made. Cost a couple hundred quid for the timber and the same again for the soft goods.

I'll forget the thousands I've spent on tools to make it though 😉

Back to the finance thing, I  heard that car dealers hate cash buyers because they make more on the finance deals

Loan rates can be astronomical for businesses that don't have decent security

It's not a con ! The price of the sofa is what you see is what you pay.  The price also partially  includes paying for the showroom lights.  So what ?

I don't require finance. Why should I pay the finance company the interest, making their profits and paying their overheads, when what I want is a sofa. It's not 0% finance, it's finance at a rate I'm not even allowed to know.

It's a con!

Is it just the fact that you personally have the contract with the finance company that’s triggering you here?
 

I have to confess I’m struggling a bit with exactly what the objection is - almost every business will have some sort of bank loan, debt issue or other source of financing sitting in the background somewhere, so with almost every purchase you make you’re paying some finance firms overheads and profits, at a rate you don’t know, whether you pay up front or not. Even if you think you know it through non-zero percent finance terms, you in reality don’t because you don’t see the rest of the contract - what you see as 4% interest could be 3%, or 6%, depending on what excess or haircut is paid from the finance firm versus the purchase price you pay. It’s not zero percent to them, but it is to you - and what it is to them is their problem, one of the factors in how they make a profit.

Yes, because then as a customer, you see their marketing, the number for their customer service hotline, their website, etc. I never chose to do business with that company, so it grates.

If I could choose to either pay up front and have no dealings with the finance company at one price, or buy the sofa and take out a load with them at another, then I would not be "triggered".

It doesn't strike me as remotely likely that the fraction of the price I pay at a company who has business loans going on interest is similar to the fraction of the price I pay when every single purchase with the company is a credit application, setting up a loan account, and everything else that consumer credit involves. Massive overheads, I don't want to pay them! But I'm happy to pay interest on business loans because that strikes me as necessary.

Does that explain it?

Yeah but if I am offered the option of paying just for the sofa, or for paying for the sofa and a finance deal, then I can compare different sofas at face value prices, and I have some information to compare the finance deal to a credit card, bank loan etc.

The arguments to say "it's just the cost to you - who cares who's getting what cut for what service behind the scenes" are OK if you've got perfect information about the product. But I don't know how good a sofa is until I've sat on it for 5 years. Knowing the comparable face value price is a guide to me as to what the quality of the sofa might be, and quite simply it is a more straightforward transaction that comes without the feeling that my money is being syphoned off and pissed up the wall by some finance wanker.

It's been some time since I bought a sofa, but are you saying DFS won't sell you one for a lump sum? Or is it the fact they won't give you a discount for it that's the problem i.e. that they insist on the same price under both models

Depends how secure the business loan is, I would have thought. Individual customers may represent a more diverse and less risky loan portfolio than having one single corporate borrower. But neither of us knows, right?

This may come back to my confusion about exactly what your options are, but given you can't access it the price DFS are prepared to accept from the finance company doesn't feel very useful information. Even if you knew it, different companies may have different profit margins, price they put on their brand, levels of overheads etc that still means you've no idea what the cost of manufacture is, which is presumably the closest proxy to the quality of the sofa...

Bingo.

I don't know, but it doesn't seem intuitively likely that the business loan is more expensive than all the individual customer loads.

Options are totally open. I don't need finance, but if I saw a really fantastic sofa that could be delivered tomorrow and was out of my budget, I might consider borrowing. Particularly if it was a good deal (like say 0% for a year, let those who don't pay up quickly pay the interest). 

But my preference is to get something from a company who give me reasons to trust them as selling decent quality at a fair price. And the "O% finance" model - pay for everyone's loans but get told you're getting a great deal in their perma-sale - gives me the exact opposite feeling. I suspect they're sharks and their sofas are probably shit.

You're looking at it from an administration perspective - and perhaps you are right, although I bet there's a lot of lawyers and investment advisors do well out of listed company debt issues versus pumping out standard contracts to individuals via an automated acceptance process.

But from a risk perspective - a single corporate borrower is all or nothing, whereas all those sofa loans (I'm sure you're going to love this bit!) can be folded together with some car loans, a bit of credit card debt etc and packaged into a nice neat securitized loan to float off into the markets, offering investors a nice predictable stream of returns from a diverse pool of borrowers.....

Yes, it is. You'll pay no interest.

It isn't. 

You have understood perfectly.

Its the same as offers such as 25% 50% 70% discount, total bullshit.

There is nowt for nowt.

I think I'd go as far as to say sofas are a rip off generally.  They are generally made of simple, cheap materials (ply, chipboard etc with a foam and fabric covering) and yet sell for an absolute fortune compared with all other furniture made of that kind of material.  The mark-ups must be huge.

Maybe. 

Although I bet a sofa made of bouldering pads would work out at least as expensive as quite a nice one.

It's over 20 years ago now but an old customer of mine used to make the frames for DFS. £4 each was the going rate at the time. 

The material costs on sofas is tiny compared to the sale price but the material cost of the sofa is a tiny part of the cost of selling goods from a large store on every trading estate. 

Not exactly your situation but for the last couple of years I've done a few 0% interest things. But always with the rule that I have the cash available to pay it off at any time I want. Its been easy, saved me some cash (I can put the extra in savings 2-11 months earlier) and my credit score has gone up nicely from all that taking and repaying of credit. For me its a win-win

They are making their money from those who miss payments mostly (again, not exactly your situation) which isn't exactly great though - I'd happily see more regulation making it harder to lend to those who can't afford the repayments, or for less aggressive punishment for missed payments.

it's a clever model, make the customer wait a few weeks so you don't sit on stock, even with all costs every £500 of sofa is likely £300+ of profit. Only the first few months are repaying the cost of the goods, the rest is delayed revenue. Even if a client defaults, if they get past the half way mark dfs etc are still profitting. The answer for Jon is shop elsewhere if they aren't happy as dfs won't flex, they will sell you some over priced insurance or cleaning products for it though.

If you're not happy, you could always sit on the floor ??

Or buy a Skoda Octavia, and sit in that. 

That fantastic margin doesn’t seem to be reflected in their 2021 financial statements. Do you mean “all” costs or are you excluding sales and distribution for example?

Its a pretty competitive sector and your comments do not really stand upto a bit of scrutiny. Most major retailers - Next, M and S for example do sofas.Never mind the no of small shops etc.

And when you get into looking at Italian or say Nordic stuff its pretty keenly priced.

I would argue that too many people look at DFS and think its a good deal.You would be surprise by looking around,

We are lucky enough to live near a sofa factory which has an outlet for cancelled orders. We saved about £600 on our pair of sofas. 

Partly. Also, it strikes me that if I buy from an established successful company then a lot less of the money that was needed to make the sofa was borrowed. With the "0% finance" model, every time anyone orders a sofa, a loan is taken out. So on the one hand we have the administration, but we also have the sheer amount of money being loaned. 

I really don't buy this idea that as much of the cost goes to a lender if I choose to deal with an established company that just deals with cash buyers (or offers finance separately and transparently e.g. with Klarna).

Equally, you don't know what percentage of the price goes to paying staff to work on Sunday, which you also don't want because you're out climbing.

So what ? If you don't like the price shop elsewhere.  It's no good asking for a lower price because you won't use their shop on Sundays.

I am buying elsewhere, because while I'm happy to pay for what I consider normal business overheads I'm not happy to pay for all their other customers' finance while being told I'm getting a brilliant "0% finance" deal.

It's a con.

Its a good point...never bought one one there. part of their marketing blitz is around their sales deals.

Its surprising if you hunt round what else is out there. Just most people do not look.

This is highly unlikely. Even successful companies that have been around for a long time tend to carry debt, and use credit to smooth out their cashflow.  

Forgive me for saying this, but you seem a bit naive regarding how businesses operate. 

Well there's no harm in asking, you could always try.  They're entirely free to say no and you're entirely free to shop elsewhere.  (Perhaps somewhere that doesn't open on Sundays.)

That's a funny analogy though, to asking for a lower price because the price on the ticket includes the cost of a finance deal for that one specific purchase that you neither need nor want.  (And again, the shop are free to say no just as the customer is free to go elsewhere.)

Naive is wrong, Jon is interested in figuring things out and asking good questions.

That's fair enough.

But if you won't buy from companies that offer 0% finance through intermediaries then that rules out a lot of companies: Alpkit, Wiggle, John Lewis etc

Most banks also offer credit cards with 0% on purchases for at least a year, and I assume Jon uses a bank. 

Read again. I don't expect that other businesses don't carry debt, I'm saying that this model seems to rely so heavily on consumer credit that it appears poor value for the cash buyer. 

I said upfront that I don't know how such swindles work. The question is about which business models end up offering me best VFM.

No one yet has convinced me that "0% finance" on this model (not the short term pay-it-off fast before the interest kicks in) is a  good deal for me.

You've offered no reasons.

Why do you think it's a good model in comparison to cash buying buying and borrowing independently if necessary? 

I offered some reasons at 15:51 yesterday, here they are:

I think some people are in the position were they can spare £50 a month, but don't have £1000 lying around. 

Even if you do have £1000 lying around, it's better to make that money work for you and take the 0% than it is to spend it.

If you make 10% profit selling something in cash, you might accept 8% for a certain % uplift in sales via finance. 

Because it's easier for the consumer. 

Sure, I accept these reasons for those who want finance, and that's not what I asked.

NO! This is the point! the £1000 price tag has built into it the cost of the finance which I don't want! It doesn't work in my favour!

And that's none of my business as a customer - I can see all the reasons it's good for DFS!

There's no reasons there that this 0% finance model offers me good VFM, so I'm going elsewhere.

Simple principle: the less bollox the better. Sure banks are 99.9%  bollox, not a lot I can do about that. Where I'm being persuaded to buy products through the offer of bollox, I have the choice of either picking carefully through said bollox to see if it works in my favour (am I going to end up a winner or a loser out of this specific wheeze), or just saying "no bollox for me thanks" and looking elsewhere.

Interestingly enough if you have a glance through their R and A for 2021 , they did not use the furlough scheme . That is pretty impressive for a retailer ( compare with say JD Sports). They also paid anybody 80% of their base salary if off due to Covid ( alot in that sector just paid SSP)Y.ou will also see their customer satisfaction rates are disclosed ( which may want you to shop elsewhere... no sugar coating there or messing around with the numbers... most of that is due to late deliveries).

Does Sofa King still exist with the immortal advertising (best read quickly)?

"Sofa King - not just low  prices, Sofa King low prices" 

Just put an order in with Made as it happens - they get recommended in all the "best sofas" articles online and generally good customer reviews. Only problem with them is you literally cannot speak to anyone on the phone - but that should keep their prices down I suppose.

Their finance offer seems less mirky to me. You either pay cash, or Klarna offer you 3 instalments. That's it - minimal bollox if you ask me.

Argos (Habitat sounds posher) had exactly what I wanted at the same price (possibly slightly nicer in fact) but was out of stock. Sofology was extortionate and their website sucks...

Sofology is DFS. 

Klarna is getting a right slating in the financial press- alot of concerns abouts its financing model................................................

Did you try loaf.

Glad I paid cash up front then. 

No, forgot. Will see in 4 months time if I'm happy or not. But it is the exact design and material I was looking for at what seems to be "the going rate" - I hesitate to say "a good price" 😉

DFS for poshos.

Oh good lord, you do go on dear.

That's great! 

I don't know if anyones mentioned this because I haven't read the entire thread but I use PayPal credit for the odd thing here and there. Four months interest free.