Thoughts on financing guitars?

[MissingSomethin]

Buy a used guitar.

 

[Nevets]

I really regret not financing a guitar and amp at Long & Mcquade when I was younger. Instead I made do with crap gear.

 

[poppunk]

Quite literally every time I see a thread like this I just laugh at the people who live their entire lives via an equity sheet. As long as you can afford what you are having to pay, and you get that value of enjoyment out of what you are buying, then who gives a crap as to who is earning the money????

It's all about balance and personal choices if you're fortunate enough to have them.

I know people who buy into the frugal living lifestyle to the extreme, supposedly so they can save to retire early or something. Except they don't. Because they're still worried about money with a massive amount in investments and in cash. And they won't spend it. Most of these people are super stressed and always waiting for unexpected events in which their hoarded money will get them through. I know somebody who was saving for a baby and college when she was 22. She's 40 now and has had one steady boyfriend in nearly two decades, and that didn't end up in a baby. She makes a lot of money; meanwhile she has lived like she makes $10/hour.

Then I know people who have had so much debt, collectors are after them, and they make very little. They will spend any chance they get, and if they can finance at high rates they don't care.

Both of these are bad situations. There's a lot of room in the middle for us to work in where (again if we're fortunate enough) we can make decisions that balance out what money we get, how we spend it, and being happy.

Me and my spouse have consistently lived below our means, but not to an excess. This is so we can save a lot for retirement (which I'm totally going to do when I get there) and have money on hand for unexpected events. I do live a significant part of my life by an "equity sheet" and balance the pros and cons, but I'm also pretty aggressive so if I'm going to do something I just do it. Financing anything but a car or a house doesn't really fit for me, because it just gets me ahead of the initial savings time for whatever; after that I'm just backed up.

I think this is a lot like eating; it's easy to get on the path of just stuffing your face, then one day you wake up and you're fat as hell. If you just spend money without thinking about it, you can get into debt and struggle. I weigh my food (estimate when I can't) and eat a prescribed set of macronutrients to control my weight gain/loss. I can't do this very well if I don't have a system. I have to have a system for money too; I don't track it super close but I have a system. I'll spend money on things that make me happy because I could just flat out die today; I don't want to spend too much of it because I may need it next week and I'm going to stop working in the future and need some then. But that's just me.

I don't have a problem with some finance people getting money; what I don't like is giving someone money when it doesn't make sense. They do often provide a service that may be important, but in my case I don't need that service so it kind of turns into rent-seeking.

 

[dankingjr]

For me it depends on the item. I am at the point where I typically only buy higher dollar instruments that are not commonly available in every guitar store. If one comes along and I have been waiting for a while for one to become available, I will jump on it and put it on on a card of some kind just so I don't lose the opportunity. That being said, I refuse to get into financial trouble and would never recommend living beyond your means, but sometimes in order to get a rare item, you have to jump on it at that moment or its likely gone for good.

It is hard to beat 0% interest on anything for a period of 12-24 months.

 

[Stinger22]

Some of the main music stores in Canada offer periodical financing deals at 0% over a 12 month term. Wondering if this is something to take advantage of or stay away from?

I’ve financed before, and I just hate having debt and owing money. However 0% only charges me for the cost of the guitar + tax. If I’m saving for a guitar anyways, why not be able to have the guitar earlier and pay it off in smaller increments? The only difference is that I’m paying tax and the full price of a new instrument. Typically I’d buy used with cash on reverb or kijiji because then I can negotiate the price a bit, but then I run the risk that comes with buying a used instrument (I’ve been had before).

What do you think?

Ask them if they will deduct the carrying cost, interest, that is built into the 12 "interest free" payments if you pay in full up front.

 

[axpro]

As someone who has worked in guitar sales over the years (and who only recently re-activated my TGP account lol) I will say Financing at zero percent with whom i think you are financing with, isn't a bad deal.... as long as you can afford it. The problem comes from someone who goes over their comfort level in financing. and when a hiccup comes down the road, gets into trouble and can't make the payments. After years of working in the business and getting MOST of the GAS out of my system, I don't have an account anymore, but I so rarely buy more gear that I don't really need one.

As for Stinger22's comment, if the company is L&M, they handle their own financing. so there is no outside agency charging them interest on the items, and thus no discount for paying in full. If it's one of the others, they might do something.

Like i said, for me personally, no account. But I have bought one "nice" guitar in the past 8 years or so. I don't count the "living my teen years" BC Rich Warlock i got for beer money!

 

[teleman1]

If you have the money and it is a no interest loan. Do the interest free loan. THe guitar would cost you 100-200 dollar? extra on 18 months financing?. Why not make money and use your dollar to make money somewhere else. I buy most large items from Best Buy on finance and on the sale. No sale and no free interest;NO BUY. As always, buying used usually makes most sense? ALSO, it is a great way to build fica scores.

 

[LJOHNS]

It’s a personal decision but I would never finance a guitar. The only thing I will finance is a house (mine will be paid off in a couple years) or a portion of a car. The car gets paid off as quickly as possible.

 

[niersbach]

For me...I have had a 400 dollar a month "slush fund" for myself for going on 20 years....whether it was used for motorcycle payment, guitar payment, stick it into a savings account payment...whatever the hell I want payment...and as long as I never crossed it, I had to justify whatever interest I paid on anything I financed against the amount of enjoyment I got out of the item. Thats how I have lived since I got out of the Marines.....when I was in the marines that "slush fund" was 120 bucks....LOL...it still existed, it was just far less due to the fact I was poor.... I had zero qualms about putting something on a credit card and what the interest was...if I was paying 50 dollars in interest every month, I can guarantee I was getting far more than 50 dollars worth of enjoyment out of said item every month too... I wasnt going to say "Dont do that because its a bad financial decision" as I would just piss the cash away on something else instead...thats what the money was for.

 

[Chad-Jag]

If it’s 0% or just a cheap processing fee I don’t see the issue. I wouldn’t like having my credit score dinged just for the credit creek so I personally don’t do it but I mean come on Eric Clapton made payments on his bluesbreaker and tomo fujita did the same on his 335.

 

[moosie]

Debt is a capital allocation choice. A tool. I'll use it for a primary home, for significant education, and with care, to start or expand a business.

I might find myself needing it for a car, but I don't care for the idea of borrowing for a depreciable item.

Borrowing for a depreciable, non-essential item like a guitar? Nope, never. NEVER.

But wait, the interest rate is 0% for four years? Still nope. Yes, I might have the discipline to invest that amount over the same period, in something with extremely low risk (but never zero!). But honestly, if I'm bothering to track all that... the price of what, a Custom Shop Fender? It just wouldn't move the needle.

 

[HERSCHEL]

I used to work for a retailer that had their own 0% card. Same bank that handles GC/MF, Sweetwater, and a whole bunch of other retailers.

The retailer pays the points up front. 6 months might cost GC 10% of the total. 48 months might cost them 30%. Thats why the promo periods change throughout the year, Synchrony (the bank) is offering the promo terms to the retailer in the form of lower fees on the term. Combine that with manufacturer/distributor promos and you get 48 months no interest at a price that makes sense for the dealer. Synchrony is absolutely not banking on the customer failing to pay. Before the 2008 recession, (GE Capital at the time) had been way too loose with who they gave credit to. It damn near ruined them when no one had the money to pay back their toys. Thats why Synchrony is handling those accounts now and has much higher requirements and offers lower limits than GE did.

Slight correction: GE spun off what became Synchrony when divesting of the Capital arm. Leadership came directly from GE and stock options between the two were plentiful for the higher-ups. That arm is still the same company it was when it was part of GE.

 

[stratadp]

Slight correction: GE spun off what became Synchrony when divesting of the Capital arm. Leadership came directly from GE and stock options between the two were plentiful for the higher-ups.

Thanks! New boss same as the old boss, then?

 

[monty]

I really regret not financing a guitar and amp at Long & Mcquade when I was younger. Instead I made do with crap gear.

Agreed. I remember saving up for a year for a good amp while using some POS to get me by. My band started gigging when we were pretty young- it would have been dope to be cranking a Marshall stack at that age instead of whatever it was I was using. To top it off I literally just saved up the money the week of a big show and had my little brother hop on a bus to go downtown to go buy it and my first go at the new amp was onstage.

 

[Dave irwin]

If you’re planning on saving for a guitar anyway and the financing is 0% then it makes no sense not to take advantage of a free loan imo. If you’re argument is “I only pay cash” that money is sitting idle in a bank account anyway making an immaterial amount of interest so what’s the point of that? If you want to get more technical about it from a finance perspective this actually frees up cash you can use now as opposed to socking it away. If you’re paying a credit finance rate then yes it would be crazy. Take advantage of free money!

 

[Stratcries]

Some of the main music stores in Canada offer periodical financing deals at 0% over a 12 month term. Wondering if this is something to take advantage of or stay away from?

I’ve financed before, and I just hate having debt and owing money. However 0% only charges me for the cost of the guitar + tax. If I’m saving for a guitar anyways, why not be able to have the guitar earlier and pay it off in smaller increments? The only difference is that I’m paying tax and the full price of a new instrument. Typically I’d buy used with cash on reverb or kijiji because then I can negotiate the price a bit, but then I run the risk that comes with buying a used instrument (I’ve been had before).

What do you think?

I see nothing wrong with buying a guitar making payments. I just finished a year with AMS paying for my Fender 68 Vibrolux Reissue Amplifier with no interest. I am now buying a Epiphone Dove acoustic from Sweetwater with no interest for 8 months. Back in the 90's I bought a lot of musical gear from Musicians Friend with no interest. They will not do that now without a credit check first. I am really glad I made the decision to buy the amplifier because it is paid off and I own it. Only a few more payments on my Dove and it is mine. If you are really interested in buying a guitar with payments I would recommend American Musical Supply. Pay for a year and you own it. After a while you make payments every month without thinking about it and it's paid. AMS is absolutely hassle free, no pressure. Make the transaction on their website or call them. I did not care much for doing business with Sweetwater. You are assigned a salesperson who is suppose to follow through with your order. Mine bugged the crap out of me. He said the case I wanted for the Dove would fit the case and it did not fit. I had to send it back. Whatever you do I wish you the best of luck.