Archive for February, 2010

Paying for that A/C System

Wednesday, February 17th, 2010

Well time has come, the Credit Card act will take place in a few days Feb 22.
You can read a good article on this on Foxbusiness

How will this (credit slam down) affect the air conditioning market in purchases? I’m not sure, but using credit gimmicks was never one of my options for my customers! There is a reason why the government created this credit card act and that is because what looked good today would screw you over tomorrow!!
I’ve looked and reviewed credit options for over 3 years now. I thought I would just fix, repair, sell and install Air Conditioning Systems to help my customers but it’s just not about selling it’s about a long term commitment I form with my customer. With that commitment I want the best affordable way my customers can pay for their central heating and air system if they should have to borrow from a lender
So let’s break it down, Let use the $5000 Tax credit figure.

My first choice is your own bank, maybe a second mortgage or equity loan.
You may find a rate around 5% to 9% interest rate.

Another option is to look for a promotional credit card that has a fair APR after the promotion is over.
You can check for credit card rates at several places on the net ones like LowCards have good information on what the best credit cards are.
A third is a low interest rate credit card if you have great credit. A visa from Simmons Visa has 7.5% interest rate.

Then finally there is GE financing that many Air Conditioning Contractors  offer their customers. I will say it is hard to qualify, GE is a tough cookie and I just haven’t had success qualifying many of my customers through them.  Another thing GE has a finance fee on the total price. Because of this you can expect an additional $500 for a $5000 purchase. With that  you get a 7.99% interest rate for 60 months which actually pans itself out over the 5 year loan.

So Let’s break it down side by side: $5000 purchase with a 60 month equal payment method

Great Credit: Simmons Visa at 7.5% = $99.60 a month

Good low Credit Card at 12% = $111.22 a month

National Average Credit Card Rate 14.14% = $116.70 a month

GE Finance: GE  service fee of $503 we need to add to the $5000 So Financing would be a total of $5503 at 7.99% for 60 months.  = $111.55 a month

Now if you subtract your Tax credit and then monthly savings in utilities you can see real value with purchasing a new Central Heating and Air System!!

Now just to drive my original plan I had from previous blogs WHAT IF THE GOVERNMENT actually thought out  the stimulus plan?  What if there was a Credit loan Plan of 3% interest on energy savings home improvement items.  Then you would be looking around $89.84 a month on a $5000 loan!

Now some more interesting facts, if the Government would have budgeted 200 billion of the 800 billion dollars they wasted in the crummy pea brain  stimulus package, Using this 3% concept I have,  would  help 40 million homes and generate a 16 billion dollar profit! So not only  (we the consumer home owner) would have a new central heating and air system that would save monthly on our utilities and cost us $10 less a month then the lowest interest rate Nationally offered Visa Card, the Government would make 16 BILLION DOLLARS off of the interest  in that 5 years!! (Roughly $400 interest per $5000 loan)                                                                         ^^good grief!^^

Before you buy, remember to look at how you buy.

Buy and Pay Smart so you can  Save Big!

Prices may vary ~ a $5000 loan was  used to see differences.