UK Interest Free Credit

[fett1972]

Hi

I have been informed by Goldsmiths that they have stopped offering Interest Free credit on all Rolex models. Has anyone else heard this?

[Swiss Mad!]

No, I don't know why?
Can't see why purchasing a Rolex should be any different to an Omega, Breitling or any other watch brand they stock.
The intetest free contract is with Goldsmiths not Rolex so it can't be them that's dictating the terms of sale.

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[emtee]

I guess Rolex is so in demand right now they don’t need to tempt people with interest free credit anymore. It eats into their margin at the end of the day so why offer it if you don’t have to.

[SC11]

It’s been like that for a while, first dropped on popular models now Rolex range as a whole.

The interest free is usually arranged via Hitachi or Barclays and in essence GS are discounting the watch as the finance company take a cut.

[Swiss Mad!]

Originally Posted by emtee

I guess Rolex is so in demand right now they don’t need to tempt people with interest free credit anymore. It eats into their margin at the end of the day so why offer it if you don’t have to.

Why would interest free credit eat into their margin? They will probably get a kick back from the underwriters of the loan - usually Hitachi Capital from previous experience.

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[SC11]

Originally Posted by Swiss Mad!

Why would interest free credit eat into their margin? They will probably get a kick back from the underwriters of the loan - usually Hitachi Capital from previous experience.

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How would it not?

The finance company charge GS a fee as it’s interest free, not much of a business model offering interest free and giving the AD a kick back!

Obviously totally different on a normal loan with the buyer is paying interest.

[Vivalas]

Just take out an interest free credit card in that case - check out Martin Lewis, he’s got the list of providers.

[Swiss Mad!]

Originally Posted by SC11

How would it not?

The finance company charge GS a fee as it’s interest free, not much of a business model offering interest free and giving the AD a kick back!

Obviously totally different on a normal loan with the buyer is paying interest.

I always thought the underwriters were taking a calculated risk by offering interest free - hoping the customer defaults on a payment thus triggering the small print clause of extortionate interest rate to complete the loan term?

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[SC11]

Originally Posted by Swiss Mad!

I always thought the underwriters were taking a calculated risk by offering interest free - hoping the customer defaults on a payment thus triggering the small print clause of extortionate interest rate to complete the loan term?

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In some cases when it’s operated like a CC they have payment options to clear within the term but can go over and pay the set APR but from what I’ve seen with these it’s a fixed amount over 12-24 months so will always be cleared while interested free.

[Swiss Mad!]

Originally Posted by Vivalas

Just take out an interest free credit card in that case - check out Martin Lewis, he’s got the list of providers.

Fair point, but I wouldn't imagine too many interest free credit cards would have a credit limit of over 10k+ if you wanted to buy a TT Sub or something like that.

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[daveathall]

Originally Posted by Swiss Mad!

No, I don't know why?
Can't see why purchasing a Rolex should be any different to an Omega, Breitling or any other watch brand they stock.
The intetest free contract is with Goldsmiths not Rolex so it can't be them that's dictating the terms of sale.

I totally agree with Max above.

Getting an interest free credit card is better, you can go in and ask for a discount or deal. If a company offers interest free, they are using what they could give on discount to pay the finance company, credit card companies hope that after the interest free period, one will not be bothered to transfer to another interest free card and just pay the interest.

Originally Posted by Swiss Mad!

Why would interest free credit eat into their margin? They will probably get a kick back from the underwriters of the loan - usually Hitachi Capital from previous experience.

The company offering the credit free deal will pay the credit company a fee for the deal, it will cut down on their profit margins but a profit is still a profit.

Originally Posted by Swiss Mad!

Fair point, but I wouldn't imagine too many interest free credit cards would have a credit limit of over 10k+ if you wanted to buy a TT Sub or something like that.

Thats a fair point Max, I suppose it could be done but would be difficult for such an amount, 2 interest free cards perhaps? I'm not even sure if that can be done.

[SC11]

Originally Posted by Swiss Mad!

Fair point, but I wouldn't imagine too many interest free credit cards would have a credit limit of over 10k+ if you wanted to buy a TT Sub or something like that.

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All depends, I personally wouldn’t recommend anyone get a watch on finance if that’s the only way they can afford it, however if you want to take advantage of the 0% they why now!

You can apply and they ask the company to up the limit.

[The GMT Master]

Goldsmiths act as a credit broker, they don't supply the finance in-house. As Sam said, they use either Hitachi Capital Finance or Barclays. Both of these will charge a fee for interest fee depending on the loan amount and the loan term. This can be a hefty amount, especially over 4 years and above.

Why effectively offer a massive discount on your best selling stock when you can't keep up with demand? A savvy business decision from their point of view, also cuts down the risk of fraud (a huge risk in the industry right now)

Chris

[SC11]

Originally Posted by SC11

All depends, I personally wouldn’t recommend anyone get a watch on finance if that’s the only way they can afford it, however if you want to take advantage of the 0% then why now!

You can apply and they ask the company to up the limit.

Meant ‘Why not’