[yashg]

Conventional wisdom says that when you buy something in cash (instant full payment), you generally get a discount and if you opt for a loan, you have to pay more.

But in the modern age of commerce and credit cards, buying something on EMI is cheaper than paying the full price for it in one go. Much much cheaper.

A Samsung washer dryer combo is 55,900 without EMI, with EMI it is 44,720 (20% discount). If you opt for 3 EMIs (ICICI) it's at zero additional cost. 14,906.66 will be your EMI.

On paper it's a loan of 43,769.00 @ 13% interest payable over 3 months. The only additional charges you will have to pay are Rs 170 as GST on the interest of 950. Making your final cost 44,890.

If you pay in one go you pay 55,900. If you take a loan you pay 44,890. Strange economics.



So even if you are willing and able to pay the entire price in one go, it makes sense to buy it on EMI. Of course this only applies if you have HDFC or ICICI cards on which the offer is applicable.

I wonder why the bank would give such a massive discount just to sell a loan to a customer who doesn't need it? To inflate the loan book? Or it is the Samsung that is footing the bill?

With that being said, banks are the original kings of discount. Unlike VC backed startups who give huge discounts and make a loss, banks have been providing rewards and discounts on cards for decades and still making a profit.

Anyway, I ended up getting a washer dryer at an incredible price.

[carboy]

Originally Posted by yashg

A Samsung washer dryer combo is 55,900 without EMI, with EMI it is 44,720 (20% discount). If you opt for 3 EMIs (ICICI) it's at zero additional cost. 14,906.66 will be your EMI.

Which model of Samsung was it?

[yashg]

Originally Posted by carboy

Which model of Samsung was it?

WD80T604DBX/TL 8KG/6KG washer-dryer combo. Everywhere else is being sold for 56K or more. The last best deal I saw on it was on Amazon at 49500.

Originally Posted by FrozeninTime

Please suggest me which brand to go for hassle free service, long life for the product.

Samsung.com has some crazy deals going on for credit card EMIs. Do check it out once.

[xotiq]

Originally Posted by yashg

WD80T604DBX/TL 8KG/6KG washer-dryer combo. Everywhere else is being sold for 56K or more. The last best deal I saw on it was on Amazon at 49500.


Samsung.com has some crazy deals going on for credit card EMIs. Do check it out once.

We purchased this washer dryer combo model from Reliance Digital during Dec 2021. Delivery took 30 days though. Swiped my Amex card for 54289/- at 0% EMI. Cashback of 12000/- processed in 90days. Final price 42289/-. Being a new model, went with 2 years extended warranty which is in addition to the 3 year warranty from Samsung.

Edit- Just checked on Samsung Corporate Purchase program- Available for 40248/- !! after card discounts.

[GTO]

Thanks for sharing, yashg! Moving your post out to a new thread. A new thread means 100X the views & 100X the visibility in search engines, including Google.

@ BHPians, if you should spot any good post in an existing thread that deserves its own new thread, please report the post and we'll move it out for greater visibility.

Thank you!

[yashg]

Originally Posted by xotiq

Just checked on Samsung Corporate Purchase program- Available for 40248/- !! after card discounts.

Wow. What is the Corporate Purchase program?

[ToThePoint]

Originally Posted by yashg

Wow. What is the Corporate Purchase program?

Tie up with your employer.

[libranof1987]

HDFC has had such offers on several outlets: Apple, Croma, LG and so on for a really long time now. They generally offer an up front discount of 6k + 0% EMI if the tenure is 6 months. Nothing less, nothing more.

I guess the hope behind such economics is cultivating an EMI habit, which would no longer be at 0%, and/or charges on default.

[Theyota]

Originally Posted by yashg

I wonder why the bank would give such a massive discount just to sell a loan to a customer who doesn't need it? To inflate the loan book? Or it is the Samsung that is footing the bill?

No one is footing the bill. Both are making money on it. It is way of making the customer feel like he got a big discount on it. When they price a product like that, they are not expecting anyone to pay the full price. If someone does pay, then it is a lottery win for them.

[shyampsunder]

The reason you see such deals is that sellers want to do price discrimination.

The willingness to pay for a given product can vary wildly between the rich and the middle class.

Ideally, the seller would like to charge the rich guy more money and at the same time drop, the price for the not-so-rich guy whose willingness to pay is not high.

Obviously, this is really hard to execute in the real world because customers paying more will obviously hate the seller for doing this. The ability to do this is also not easy, especially in the retail world.

This is where EMIs come into the picture. You typically will never see the rich guy even consider EMI because he has more than enough money to pay for the product without any loan. Since the seller knows this, the product is marked up and priced at the price point where he believes he is maximizing his profits from the rich customer.

To get sales from the not-so-rich guy, instead of directly lowering the prices of the product, the seller offers a lower price to the bank funding the EMI. In this scenario, all the entities involved are happy:

1. Seller: Gets to sell products to a consumer base that cannot afford the sticker price of the product.
2. Bank: Gets to expand the loan book. Also, make money from customers who fail to pay on time.
3. Customer: Gets an amazing deal on the product and is happy

[sukhbirST]

Personally have seen such discounts on products which are going to change or get upgraded. You maybe sheer lucky too. Noticed during last sale on flipkart , great discounts for few hours only. Have to keep checking, though it is a pain. About EMIs, it is like the bus conductors handing over tickets with change/ balance written at the back. They surely know few will definitely miss collecting. This is universal in India and it really works well for the driver/conductor who manage some earning for themselves. Similarly for EMIs ,they expect some to miss or delay the EMI , which is what they are looking at.

[fiat_tarun]

If you have the money to pay upfront, take the longest no cost EMI tenure being offered, get the upfront interest discount and then call your bank and tell them that you wish to cancel the merchant loan and will pay the full amount.

I have done this with HDFC credit cards and saved around 5k additionally on a 45k TV. The cancellation is entirely penalty free but you need to clear your entire credit card outstanding along with this amount, so plan the call to your bank closer to your payment date.

[carboy]

Originally Posted by fiat_tarun

If you have the money to pay upfront, take the longest no cost EMI tenure being offered, get the upfront interest discount and then call your bank and tell them that you wish to cancel the merchant loan and will pay the full amount.

What is the point of this if it's a 0 interest EMI?

[yashg]

Originally Posted by Theyota

When they price a product like that, they are not expecting anyone to pay the full price. If someone does pay, then it is a lottery win for them.

Originally Posted by shyampsunder

The reason you see such deals is that sellers want to do price discrimination.

The willingness to pay for a given product can vary wildly between the rich and the middle class.

Seems like it. If someone does pay the sticker price, it's a lottery. It's also a great way for banks to acquire new customers. Since these deals are available on specific cards, those with decent credit score can choose to get these cards. And for customers who have multiple bank cards, they will use this specific bank's card for the transaction.

Originally Posted by fiat_tarun

If you have the money to pay upfront, take the longest no cost EMI tenure being offered, get the upfront interest discount and then call your bank and tell them that you wish to cancel the merchant loan and will pay the full amount.

Yes, that will save the unnecessary GST one would have to pay on the interest component.

[fiat_tarun]

Originally Posted by carboy

What is the point of this if it's a 0 interest EMI?

There is no zero interest EMI now, as that has been banned by the RBI IIRC, that's why it has been renamed 'no cost' EMI. The interest amount is given as an upfront discount which will be added back to your EMI's and you end up paying that amount eventually.

What I have said above enables you to avoid paying the interest part completely. So in effect you can get the unfront discounted interest completely waved off!

Originally Posted by yashg

...
Yes, that will save the unnecessary GST one would have to pay on the interest component.

No, you can save the entire interest amount that was pre discounted at the time of purchase. Depending on when you call your bank, you will only pay the interest for those many days.