Best way to finance watch at 0 or low %

[bmw tuning]

Hello all! New member here, been browsing for awhile. Let me start by saying I can pay cash for the watch now, just to stop the debate of if you can't afford to pay cash you can't afford it, as I am usually good to give that same advice.

However I've paid cash for almost everything my whole life. Now at 34 I need to start building my credit. I've been looking for ways to get my credit up as I plan to start house shopping in the next year.

I financed my BMW about 2 years ago, but the 17% loan killed me throwing all that money away so I just paid off the car, I only financed it to build some credit anyway. I started my own car dealership just under 2 years ago and I thought a nice present to myself for a successful couple years would be a nice watch that I have wanted for quite sometime. I'm very frugal with my money and always look for the best deal, there for I am primarily looking at pre-owned watches so that I don't take that initial hit of depreciation. I now alot of jewelers offer 0% financing but usually its on new products and they don't want to negotiate on price much..

So I come to the experienced people on this forum what is the best way to get a great deal on a nice watch and finance it at 0 or near 0%? Can I can pay cash for the watch I want and refinance it some how, so I get the cash price or some credit card out there that offers 0% for a certain amount of time like a year? Thanks for any help!

[The Joker]

Not sure where you are from, but in the UK most jewellers offer 0% finance. It's a no brainer really. But you won't get any discount if you take the finance.

[Gaijin]

Originally Posted by The Joker

Not sure where you are from, but in the UK most jewellers offer 0% finance. It's a no brainer really. But you won't get any discount if you take the finance.

He is from Portland Oregon USA. Welcome aboard and you are a very bright man at age 34. Much brighter than I was . Using your credit card is not such a bad idea. I have excellent credit now but when I went to buy my first house I did not and that was painful.

Buy away, make your payments on time and your credit score will go up. Pay more than your monthly payment and get it paid off a bit faster if you want. If you take the zero percent pay it off in full before the time period expires (whatever the % length is for, usually a year) or you will get hammered for all the interest backdated.

What are you thinking about buying?

[MonBK]

Eat the cake and.........is always a hard combination.

[Andad]

Eat the cake and.........



Yeah, that is a tough one Mon.

My guess is that the discount on a cash deal equals the fig on a no interest purchase.

[SUBversive]

An AD here usually offers 0% on purchases. I haven't done it but its tempting.

[Mr. RoC]

Very simple if you have the cash, regardless of where it is saved, and can afford your purchase.

Use your or start a bank Line of Credit or use your credit card. Now with a CC you may not get a great deal but if you get a bank draft (same as cash but there is usually a bank fee for the draft) you should get a deal from the AD, hopefully. Now the next day or two transfer your cash to your line of credit.

Bada Bing Bada Boom, you just borrowed from the bank and paid it back in full. The only slight draw back is you pay a tiny bit of interest and depending on the rate it should be a few dollars and the bank fee for them to issue you the bank draft.

I did this three times on our three Rolex purchases.

No need to carry a wad of cash in the pocket and the store save on CC fees by not charging the purchase to your credit card.

[james1787]

Originally Posted by Mr. RoC

Very simple if you have the cash, regardless of where it is saved, and can afford your purchase.

Use your or start a bank Line of Credit or use your credit card. Now with a CC you may not get a great deal but if you get a bank draft (same as cash but there is usually a bank fee for the draft) you should get a deal from the AD, hopefully. Now the next day or two transfer your cash to your line of credit.

Bada Bing Bada Boom, you just borrowed from the bank and paid it back in full. The only slight draw back is you pay a tiny bit of interest and depending on the rate it should be a few dollars and the bank fee for them to issue you the bank draft.

I did this three times on our three Rolex purchases.

No need to carry a wad of cash in the pocket and the store save on CC fees by not charging the purchase to your credit card.

We do this with our credit card all the time. We'll make big purchases on it and then just transfer the cash the next day (or even the same day).

[Mr. RoC]

The OP mentions financing or cash and asked for suggestions.

Plus it sounds like the OP wants maximum discount one could get. Bank Draft/cash will most likely net the OP a better discount over Credit Card as the shop will be subject to a CC bank fee of around 2% give or take a percent or two , could be even more, depending on the shops contract with the CC company and generated sale transaction the shop deposits and because of these CC fee's the shop will put this into consideration when discounting.

[chicfarmer1]

Figure out what your main goal here is, because I see several different goals in your post. One is to build credit, and another is to get the best "cash" deal, and finally obtain 0% financing. Well to my view, a credit card purchase accomplishes all of these. I do not believe that a CC purchase always means you get a worse price than any other method including laying dollar bills on the counter.

If you use a CC, you:

Build your credit if you pay off in full, and
depending on the card acquire other benefits, and
in effect get a 0% loan for the credit period of your card's terms.

If you insist on 0% as the big achievement during negotiation, that will not be compatible with getting the best price. (Yes, people claim they got both a nice discount and 0%, but I take that with a big grain of salt.)

[MonBK]

As usual I'll go against the main stream.

The way to build your credit is NOT to pay off your monthly purchases in full but to make monthly payments in a timely manner.

Get 2-3 CC's and pay them monthly and within a year you will have 700-800 points which your lender will look favourable upon when your house purchase comes around.

[chicfarmer1]

Originally Posted by MonBK

Get 2-3 CC's and pay them monthly and within a year you will have 700-800 points which your lender will look favourable upon when your house purchase comes around.

After several years of paying them off in full you can have the mid-800s, and then your lender will really, really like you.

[wantonebad]

Originally Posted by MonBK

As usual I'll go against the main stream.

The way to build your credit is NOT to pay off your monthly purchases in full but to make monthly payments in a timely manner.

Get 2-3 CC's and pay them monthly and within a year you will have 700-800 points which your lender will look favourable upon when your house purchase comes around.

Why do you think that's against the mainstream? that's 1000% correct Mon, building credit and being a good money manager are not necessarily the same thing. And in order to build credit you do have to carry some balances at some point in your life, and you do have to show a track record of paying them over time ON TIME!

The main factors for FICO scores and what lenders look at are:
1. Any derogatory listings (collections, late payments, charge off's)
2. Available credit (the limits on your accounts)
3. Utilization (what percentage of that credit you use)
4. Age of the accounts ( how long you have had them)

Originally Posted by chicfarmer1

After several years of paying them off in full you can have the mid-800s, and then your lender will really, really like you.

Also correct, but its because of Mon's first point which is showing a track record over time that you are worthy of a totally vanilla AAA+ rating.


**EDIT TO ADD
Another trick is if you have a family member with established credit, talk to them about adding you as an Authorized User on one of their older CC accounts, this will instantly add age and a payment history to your account portfolio and can add rocket fuel to your FICO scores. Needs to be mutual trust and clear ground rules for this to happen but if you want to buy a home in the next few years this maybe just the trick to get you over the hump.

[MonBK]

[QUOTE=wantonebad;4002255]Why do you think that's against the mainstream? that's 1000% correct Mon, building credit and being a good money manager are not necessarily the same thing. And in order to build credit you do have to carry some balances at some point in your life, and you do have to show a track record of paying them over time ON TIME!

The main factors for FICO scores and what lenders look at are:
1. Any derogatory listings (collections, late payments, charge off's)
2. Available credit (the limits on your accounts)
3. Utilization (what percentage of that credit you use)
4. Age of the accounts ( how long you have had them)

QUOTE]


That's kinda what I meant but in simpler words.

[chicfarmer1]

Originally Posted by wantonebad

The main factors for FICO scores and what lenders look at are:
1. Any derogatory listings (collections, late payments, charge off's)
2. Available credit (the limits on your accounts)
3. Utilization (what percentage of that credit you use)
4. Age of the accounts ( how long you have had them)

[Mr. RoC]

Then the OP will incur interest if the OP does not pay off debt in full by the due date and that will give a negative affect to the maximum discount the OP would have received.

There are many tips on how to build one's credit score and paying debt in full by the due date is one of them.

It is also advised NOT to max out you credit card, the higher the balance the more impact it has on your credit score.

[wantonebad]

Plenty of ways to build credit, not sure I'd pick watch buying as the best way. Getting the best price AND using credit may not work together, but I would be prepared to pay cash for the best price.

If you really don't care about the APR or fees then you could always take a cash advance on one card and then immediately transfer the balance to another card but that will cost you a premium and some cards won't transfer cash advances to promotional APR's so read the fine print.

Probably better off not getting a discount and just go through the Jewelers financing program and pay it off ASAP. Amex Platinum has no preset spending limit, so in order for it to report a high limit I used it to pay for a Milgauss and a Daytona, because i wasn't going to get a discount for those models in 2008 anyway and then I paid the balance off. So now My Amex reports as $18,000 limit card which is better for your credit the a no preset-limit card.

Lots of tricks like that at www.creditboards.com they have a lot of people there repairing their credit and learning how credit works. If you sift through all the collection agency posts and look for the tips on building and improving credit there is some very valuable information there.

[GermanyMatt]

17% interest rate on a car loan?!?! What the hell???

[salem65]

Originally Posted by GermanyMatt

17% interest rate on a car loan?!?! What the hell???

That is exactly what I though when I read it. Maybe he missed the decimal point. Or did he use a credit card!

[colpol]

Few years back - I bought a Kawasaki motorbike - I probably could have bought it cash but they were doing 0% finance over 2 years. My incentive was to pay it off doing OT. I calculated out how many hours OT a month = the monthly payment so that I knew what I had to do. Most months done with cash to spare.The bike was paid off on OT & my cash in bank remained intact

same principal for the watch

Finance makes things a helluva lot easier especially low\ 0%

[77T]

Welcome to the forum.

I got lost somewhere between "I need to start building my credit" and "I started my own car dealership just under 2 years ago". Wondering how you did the latter without the former...

But to tackle your question - if you want to get the best price on the pre-owned Rolex, paying cash is right path. And if you want to get free financing, then lend the money to yourself.

How?

Well since you are self-employed you can start a tax-deferred self-directed 401k using the cash you said that you have on hand. Make sure the Administrator firm you choose has a structured personal loan feature.

Why Personal Loan? You can take a personal loan from your Self Directed 401(k) in an amount up to $50,000 without any restrictions on how the funds are used. You just pay the money back to yourself at a "fair market" interest rate. And since you're paying yourself back, you keep all the "interest" included in the monthly payments. So same as 0 financing...maybe better...

BTW, I financed many big ticket items that way in the past - especially during poor Wall St. and bond market periods like after the dot com bubble burst. My own payments were out pacing S&P annual performance.

The only time this strategy is flawed is when the money you lent yourself could have been safely invested at a greater return than the FMV interest rate you'll pay back to yourself.

[Cesium133]

Originally Posted by 77T

Welcome to the forum.

I got lost somewhere between "I need to start building my credit" and "I started my own car dealership just under 2 years ago". Wondering how you did the latter without the former...

But to tackle your question - if you want to get the best price on the pre-owned Rolex, paying cash is right path. And if you want to get free financing, then lend the money to yourself.

How?

Well since you are self-employed you can start a tax-deferred self-directed 401k using the cash you said that you have on hand. Make sure the Administrator firm you choose has a structured personal loan feature.

Why Personal Loan? You can take a personal loan from your Self Directed 401(k) in an amount up to $50,000 without any restrictions on how the funds are used. You just pay the money back to yourself at a "fair market" interest rate. And since you're paying yourself back, you keep all the "interest" included in the monthly payments. So same as 0 financing...maybe better...

BTW, I financed many big ticket items that way in the past - especially during poor Wall St. and bond market periods like after the dot com bubble burst. My own payments were out pacing S&P annual performance.

The only time this strategy is flawed is when the money you lent yourself could have been safely invested at a greater return than the FMV interest rate you'll pay back to yourself.

+1 There you go!

[seabreeze]

In order to get the best deal the deal will likely need to be transacted in cash.

0% financing is likely not possible anywhere .. 1% over prime maybe if you are a homeowner and have a credit line

Buying the watch on credit card and paying it off the next day does nothing for your credit except it may get you mileage points

My advice, if the goal is to build credit and get a good price is to pay cash for the watch, then take a cash advance against a credit cardbfornjust a portion, say the watch is 5000, then put take 2000 on the card and pay it off over 24 months. That will limit your interest exposure , even at 10% would only be $300. That is the price of building credit.

Keep up the good thinking