Think carefully about cost — the price tag of your new device or appliance, plus any extras. Examples include:
- optional delivery costs
- optional installation / set-up costs
- optional tech support or extended warranties
- set-up fees and interest — and sometimes payment insurance — if you buy on credit.
Contents insurance generally covers most devices and appliances. Check what you can claim for and what items need to be named on your policy. Avoid doubling up on cover you may already have, if you're offered insurance in-store.
If you buy on credit and there's a problem — with your device or appliance, or your repayments — talk to the retailer or finance company as soon as possible.
Delivery and set-up costs
For bigger or more complicated devices and appliances, eg fridge-freezers or smart TVs, you might need help with delivery or installation — especially if:
- you don't have suitable transport or muscle power
- you are not confident about how to set up and use it.
You could ask a friend or family member to help. If that's not possible, you can:
- use the retailer's delivery and/or installation service
- get a quote from a trusted expert, eg a plumber for a washing machine.
For more detail, including your rights if something goes wrong, see:
Retailers often offer service and support packages — and extended warranties — when you buy devices and appliances. Check the fine print. Are the extras worth paying for?
Your rights compared
Buying on credit
Saving up is the savviest way to buy something new. But that's not always an option, eg your washing machine packs up and you need a new one right away.
Spreading out payments over time can be an affordable way to buy big-ticket items. This is buying on credit — also called credit contracts or credit sales. Examples of this way to pay include:
- credit card or finance card, including interest-free offers
- hire purchase
Like any other type of borrowing, there are risks. Work out how your income or spending might change while you're paying it off, eg rent increase, switching jobs. If offered an interest-free period, ask yourself if you can pay it off before the interest goes up. Once the zero-interest period is over, interest rates can be high.
Also think how you'll avoid the temptation to spend more.
Your finance company might offer to increase your credit limit. Because you don't have to pay it off immediately, you might buy more than you can afford. That new TV might become a TV and a blueray player, or a much more expensive TV. With electronic products especially, there's pressure to buy the latest model.
Check for hidden fees, eg if you want to make extra payments or pay it off early. And if you don't pay on time, you might end up paying extra interest (compound interest).
Price + extras = true cost
When you pay by credit or with a loan, your new purchase can cost more than what's on the price tag. Remember to add on:
- set-up fee
- payment protection insurance, if required by your lender.
Don't focus on the minimum payment each week or month. Add on all extra costs to see the total you will pay, eg a $1,200 TV may seem affordable at $16 a week over two years. But add up the interest and fees, and you may find the true cost is an extra $400-500.
How to work out true cost