The positives and negatives of buying a boiler on finance

- By Justin Elliott

The majority of us will have few options when it comes to replacing our boiler, other than going into debt. It is a sad fact that few people have the £3,000 required for a new boiler in savings and this is why finance deals really are a great way to take care of a boiler replacement at a time when it is a necessity.

There are many finance options available and their flexibility makes them very popular. Energy companies, installation companies and manufacturers all offer deals which range from 0% finance through to flexible payments and payments spread over many years. All are designed to make the repayment process as painless as possible. Despite this, there are still many pros and cons when it comes to boiler finance.

The advantages of boiler finance

  • You will be able to replace your old boiler more quickly. This is especially good if it has broken down in winter, right when you need it most.
  • You are unlikely to need to pay very much money, if any, upfront.
  • Your new boiler will be highly energy efficient, meaning you will be saving money on your energy bills.
  • Your boiler finance may also come with a servicing package and ongoing insurance, giving you peace of mind.
  • You get the benefit of guarantees and a warranty for at least the first 6-12 months after installation.
  • You can use your boiler before you have even paid for it.
  • The payments can be spread over several years, making it much easier to budget for this large expenditure.

The negatives of boiler finance

  • This is a commitment which could last for several years.
  • Even if you move house, install another boiler or your boiler breaks down, you are committed to continuing paying the monthly instalments.
  • Your interest rates could be very high – even up to 30%. The overall cost will be more than the upfront cost.
  • Failure to make payments on time will seriously impact on your credit rating and could mean you have trouble getting finance in the future.
  • If you already have a poor credit rating you may find that you are charged a higher interest rate or refused credit at all. This leaves you only one option – a government grant, which is tricky to get.

It is clear that being fully informed about your finance deal and checking all the paperwork is essential. You should look at the overall cost and see if there is any other way of paying for the boiler in a cheaper way. The Green Deal may be one option, or even a short term 0% credit card deal. Personal loans can also sometimes have a lower interest rate.