HIFI Ownership - Buying, leasing, buybacks

Hi-Fi Corner
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A cable supplier i have followed for a few years now are now offering a 20 year guarantee on their cables, plus an option to get a 70% trade in at any time - assumes you purchased direct from an authorised dealership.

This got me wondering who’ll HIFI ever adopt the Mobile Phone strategy (heck cars have already and the push from OEMs favours not being locked in), logic being like a mobile phone buying a £1200 handset is too much to swallow, but £50 a month well thats easy isn’t it.

I do like this particular cable company with their like it or return it no questions asked, why because they are confident in their product.

Anyway wondering if Naim or other manufacturers, dealers are looking to follow or at least offer such an purchase scheme, with buy backs or just pure lease options.

Case on point certain car brands offer a £2,000 a month lease, but you can swap cars every few months, it’s hot i will have a convertible, neighbour has a new SUV (you feel inadequate) for next month you swap. Not very environmentally friendly but even the likes of Volvo CEO have openly suggested this is the future model.

Imagine swapping to a ND555/500 setup for a few months (lol wonder if would even settle by then), then back to a Nova, or purely using such an ownership model as an upgrade path on generous trade ins.

And that is the issue, the residual value once you leave the dealer can be your car/HIFI that was purchased new was £50,000 is now worth £20,000 just as you left the showroom, no different than your Nova, 500 series, Statement.

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That would be up to the dealer rather than the manufacturer in most cases.

Certainly, when I was in the trade 25 years ago, we did all sorts of payment and financing options. Everything from deferred to 24 monthly instalments etc.

If a dealer wants to purchase gear and lease it out, there’s nothing to stop them.

But a big difference is who is the customer. Asset finance laws on almost every country allow the customer to both list the item (such as a car) as an asset on the balance sheet and to write off the depreciation of the book value. This is a massive benefit to business but less so to private individuals. A company that leases a fleet of cars for employees and equipment gets a all the benefit of a full purchase with none of the risk. Private individuals can’t benefit from any of that. So you might as well just do deferred payment or instalments - which as I said, many dealers do offer anyway.

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I was thinking more the leasing direct as the OEM.

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Well it’s not impossible on paper, but I doubt your find a dealer that wants to become a “broker” instead of a retailer and, as someone who supported enterprise level Asset Finance software I can say that the cost and expense of managing the accounts for leasing is astronomical. It is extremely complex. You have accruals, payments schemes, collections and invoicing and multiple currencies and with leasing you need to run depreciation and interest calculations nightly on every contract and every item.

It is a total nightmare. Unless you have truly enormous economies of scale, it is just not feasible,

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I’d expect a chauffeur for that money - that equates to £24,000 a year just for a car. At that rate I could make all my journeys in a luxury taxi.

When I was knee high to grasshopper we used to rent our TV from DER. Used to work well enough and the programmes were very much better. So I guess it could work, but I’d hate all the disruption of chopping and changing.

Yes I would consider leasing a car - for £300 a month. I’m not sure I’d do likewise for hi-fi as I expect mine to remain as is for at least 10 years.

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I’ve never been convinced by the hire purchase / leasing markets, though I can see how they can appeal to people starting out. Many years ago I did instead use personal loans and credit card credit, expensive though the latter interest is, But only on the basis that I would otherwise save the same amount monthly, the loan simply allowing the purchase a lot earlier. As I got a bit better off I ceased buying on credit.

As for mobile phones, I vehemently detest their attitude/approach to contracts including supply of phone, being based on rampant consumerism pushing you to buy the latest model, even if to you it may not have any added benefits.

The £2000/month leasing example for a car is more than the average cost of depreciation and servicing of any car I’ve had - annually!

But guarantees and buy back options or extended home trials are quite another matter! My amps and speakers were sold with 20 year guarantees when new (though limited transferability to new owners). And the store I bought Hugo from offered a guaranteed buy-back facility, of which I availed myself when I upgraded to Dave two years later.

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I’m unsure whether this practice still occurs, since I’m on a sim only deal, but previously, whenever my two year contract was due for renewal, my having repaid the cost of the phone to my provider, there was no reduction in the monthly figure paid, so anyone not wishing to upgrade their handset at that time would simply start paying for their existing one all over again.

Wot a rip-off. :-1:

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In defence of phone deals the driver to innovate and develop better phones relies on income.
We’d all still be carrying brick-sized dumb phones if people weren’t trading up and enabling the income stream for R&D.
Of course Apple do well out of it but the phone retailers seem to have a more precarious situation.

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Quite. My son’s phone deal expired last year and when I casually enquired how much the monthly cost would drop by I was surprised to find it stayed the same, despite having reached end of contract and the phone now fully paid for. The benefit is that a new deal offered a new and better phone (ram, cpu etc) with a much much better data deal so it was a no-brainer. He gets a new phone, I get his previous still fresh as a daisy 2 year old phone. Let’'s be honest; our (my?) generation isn’t so bothered about having the latest phone. Youth Of Today though live their lives through their phones so it’s reasonable for them to be up to speed in all respects, and not lagging behind their peers with apps etc that no longer work. You might not like it but that’s the modern world. We all met at the park to play football till dark and try & cadge a snog occasionally, this lot use their phones in between their personal meet-ups.

Leasing hifi? I don’t think there’s a big enough market to make it viable. There’s no reason why phone companies couldn’t do it but it hasn’t worked for any other domestic electronics like PCs, laptops, tvs, PVRs etc so I can’t see it working for this niche market sector. You can bet your last dollar that all of the above have been investigated - if there’s money in it someone would try it.

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It’s certainly an interesting concept. I’ve often thought of the benefits of such a scheme.
“Good sound” is so subjective. Imagine being able to live with, say, 12 different systems in each month of a year before deciding on what you really want to invest in.

Can’t begin to imagine the complexities of making such a thing a reality though, the risk to a small dealer, for instance, could be huge.

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All the phone company is doing is spreading the capital cost over two years and then adding the line rental. It’s no different to buying hifi on a personal loan and spreading the cost that way. The only thing you can be sure of is that the phone company is charging a higher interest rate than you’d pay if you sourced the loan yourself.

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I’ve only ever had sim-only deals for my personal phone, but best part of 25 years ago I had a work supplied phone, and because it’s purpose required my to have it with me at all times I had successfully pushed for the smallest, lightest (and most expensive) phone on the market. When that contract came up for renewal, the phone company really pushed hard to get me to “upgrade” to their latest best model - and the sales people seemed genuinely to not understand that the addition of a camera and a bigger screen actually made it a worse phone, being bigger and heavier - when I literally only wanted a portable telephone! When it died, unfortunately I did end up with an inferior phone because they no longer did a miniscule one.

Mind you, these days my mobile phone is not a phone, but a wonderfully clever pocket calculator, world map with GPS, compass, sound level meter, torch, email client for both work and home, alarm clock, cycling/walking tracker, satnav, currency converter, foreign language translator, carry-anywhere still and video camera, note taker, flight booker, internet browser, portable music player, visual communicator … that can also be used as a telephone. It was bought under contract by my son, but now he perceives that the annual improvements have ceased to provide such significant steps up, he has declared that his current contract is the last.

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Maybe we are the older generation, but the kids nowadays and TOWIE types just live by the month, as long as they can pay a monthly the idea of the total debt being substantial is irrelevant to them, not unlike our home ownership mortgage mindset.

Actually my recent mobile i swapped to buying the handset outright and a PAYG SIM, for me it worked out £250 cheaper than the equivalent so called loyalty upgrade from Vodafone, which was a crazy £80+ a month !!!

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Gulp and double gulp - I pay £3 a month for mine (SIM only).

You are probably right. Only HP I had (apart from my network switches) was 0% for 4 years on Vispring beds. I’d never take on a finance deal from a car dealership as when I’ve done my sums the outcome didn’t look attractive.

If you only have enough to survive one month at a time then what happens if you lose your job; unfortunately something that may happen to lots of folk. If I lost my income at least I’d have my cottage, hifi, music collection and car - if I’d leased them I’d be in real trouble. It worries me if young folk think that way as the protective safety net of a final salary pension has all but vanished and young folk do get old eventually.

I would hope with the Green agenda many young people would move towards buying good quality products that last. The youngsters I know are quite sensible, do think about their future and have been commendably helpful during the Coronavirus crises.

A Naim Atom with some suitable speakers could provide them with musical delight for many many years.

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Indeed. Surveys have shown that millenials care very little for ownership of anything. Everything is shared ownership or a service.

So many things are priced too high (houses) and the global job market requires them to be highly mobile. So owning stuff just isn’t as ingrained.

Personally, I strongly dislike it when services supplant goods but it’s the way of the world these days for many things. If you’re a large enough business to afford the complex accounting costs, then taking the option to buy your product off the table entirely and only offer subscriptions is a very attractive way do business [and rob powerless customers].

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Millenials (if we must call them that) know that house ownership isn’t the readily achievable target that it was for their parents’ generation, and have largely adjusted to the idea that renting is the norm (much like a lot of continental Europe). As the idea of trying get a deposit together recedes with house prices rising faster than they can save the incentive disappears, but they still have money - once rent bills & shopping is taken care of they like this generation have disposable income. I think it’s unfair to criticise them for not doing what we did. Every generation changes the way they do things, the current one are no different. The norm now is to pay for what they use, not to buy outright something that they fully expect to move on in shorter time period.

We didn’t keep mobile phones beyond contracts because the concept didn’t exist. We weren’t troubled by home computer or laptop specs being overtaken for the same reason. We didn’t have to worry about streaming tech - the biggest music format debate in my day was whether Elcasettes were batter than normal tapes, and whether Radio 1 would ever be on VHF full time, or indeed whether a 10-speed bike was worth it over 5 gears (it was). I’ve no doubt that if we’d all grown up with ever-changing tech we’d have also been as transient about it as these millenial people are.

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They were, they were

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I wasn’t meaning to criticise, but express some concern. I think the worst thing is living in the past (even if the Jethro Tull track remains a favourite), but maybe the young take inspiration from cupid:

Yesterday has just departed
Yet tomorrow hasn’t started
All that really matters is right now
And you should live a lifetime in each minute
Take the sweetness from within it
Yesterday has gone without a sound

What’s the good of living in the past
Look around you things are changing fast
Don’t concern yourself with what’s ahead
It’s too late to live when you are dead

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Even the various app stores have a steady trend away from free with spam, paid and now subscription apps.

I still think as long as a company can make a profit, maybe at least breaking even on their variable costs, then surely costs can be saved elsewhere in the organisation.

The elephant in the environmental room, is WTF do we do with all these cars and mobiles that are ditched after a year or less.

Bringing it back to the NEW NORMAL (that said the M25 was once again the old normal - Gridlocked yesterday), for cars in particular do i really need to own a car now, heck even that fancy London flat, can i just AirBnB around the work.

It used to be called Porsche Passport, but i know allot of folk using this and similar brands equivalents, most contractors so no doubt cookign up some tax write off somewhere.

Maybe Naim could lead to way and have:

Entry - Atom based setup (all speakers, stands, cabling included) - £50 a month
Mid - 272/250/Kanta - £200 a month
High - ND555/500/? - £1000 a month

Or a customised model, with minimum terms, or the Uber swap wherever, at some point Naim could offer up Refurbished items to sell to just like Dyson and many others do via their website or even their eBay shop with a warranty.

So Naim gain some upfront monthly cash and assume a minimum feature second used value.

Plus i always thoughts companies benefit with the refurbished (returns) model, as they write of the return and then sell the refurbished device.

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Cut dealers out of the loop altogether if this COVID thing continues every year, or dealer takes a cut of the subscription sale, they then don’t need to sit on loads of stock to sell, more scheduling the subscription equipment.

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Call me old fashioned but i like to own things, save a bit, take my time choosing, enjoy for many years. I don’t see the appeal of being able to swap components every few months and can’t really see this ownership model working for Hi-Fi.

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