The German citizen likes to live his life on credit, be it in the electronics store or in the furniture store: The temptations of financing offers hardly anyone can resist and so is just the new kitchen, the new TV or the new car financed by a loan. So at least the statement of the consumer center NRW, because according to their statement, the consumption on the pump has become a matter of course for half of all Germans. However, it is precisely this self-evident fact, with which the German citizens accept these superficially favorable financing offers, that the consumer advocates now again give reason to warn against these trade credits – and for good reason!
Financing with pitfalls
About half of all transactions at the debt counseling of the consumer protection association results from loans for the purchase of goods of all kinds, which is just the main cause for criticism from the consumer advocates. Because one thing is certain for them: As cheap and uncomplicated as the financing offers may seem at first glance, there is still behind it a classic installment loan with all its classic features! But this fact is often faked in the financing offers and is thus clearly to the detriment of a consumer.
Long-term problem: dealer financing
The so-called zero-percent funding or free financing are particularly under criticism, because not infrequently, the installment is tied to a loan through the dealer to the conclusion of a mostly expensive residual debt insurance. It is not uncommon for the financing contract itself to conclude another financial product subject to a fee, such as a credit card agreement.
Another criticism of the consumer advocates is also that the promised interest free for the credit is given in most cases only for certain maturities. Over a longer repayment period, interest rates in the double-digit percentage range may become due after the interest-free phase. Depending on the amount of the loan, therefore, a financial and often uncalculated burden on the customer should not be underestimated.
What really upsets the consumer estimator: If the goods are claimed by the customer, the agreed payment by installments will remain as a rule. Sounds unfair, but is classified by the highest court as legitimate: The mere fact that the consumer for the loan does not pay interest, was sufficient for the Federal Court in 2014 as a reason to exclude zero-percent financing from the usual 14-day cancellation for installment loans.
Consumption on credit is tempting
The fact that the entire system of “consumption on credit” or “zero percent financing” is a thoroughly profitable business for both retailers and the financial institutions behind them is shown by the results of a study conducted by the banking association in cooperation with the Gesellschaft für Konsumforschung , The study found that around 65 percent of all financed purchases would not have occurred without the possibility of financing or a loan from the dealer. That says it all!