This is the question we should all be asking ourselves when it comes to purchasing a product of any kind, but it can be far more important with some purchases than others.
Let’s start with some marketing tactics: The best deal illusion. The ‘best’ deal promise is a common marketing term used by almost every industry these days to make a consumer feel at ease making a purchase; safe in the knowledge they have come to the right place and won’t be taken for a ride, and it’s an extremely effective one.
Let’s think about it for a moment, what does ‘best’ actually mean to you? It can refer to a whole host of things when talking about a product, but most people generally associate ‘best’ with cheapest, and it’s that assumption which is the state of mind clever marketing types are targeting, because it will get us in the door. Cheapest compared to what; a better-quality product? And best deal for whom, and in what circumstances?
One person’s opinion of the best of something will generally vary greatly from another and that is why it is such an effective marketing tool; it cannot be pinned down to just a particular price, condition or other variable. This is also why it is favoured in advertising over a statement such as “cheaper than the competitor next door” Which would have a far too literal and definite statement of difference between two products, and therefore too difficult to make a disclaimer about when comparing them.
Here’s the scenario: Your friend recently got themselves a new car that they seem to be very proud of. They tell you that they got the ‘best’ price on it from the dealer and at X.X% interest, the finance product was the ‘best’ deal available too.
Now this all sounds very promising, and a very basic understanding of finance will tell us that low interest rates can only mean a good thing. While this holds some truth it certainly isn’t the whole truth. Rarely do we ask, “over what term was that?”, “what were the set-up fees?”, “what are the early termination costs?”, “Is there a balloon payment?” And maybe most importantly; “what are the repayments over that term?” These might seem like too personal of a question to be asking your friend, but there are certainly questions you should be asking yourself and your broker when seeking your next finance arrangement.
The important issues to be addressed when making any purchase of this nature should be; “Are my needs, objectives and expectations the exact same as the next customer?” It’s highly unlikely the answer will be yes. The ‘best’ deal for one person, might not necessarily be the right deal for you, and it’s the right deal that we should be seeking as individuals with individual requirements and circumstances.
All products can vary greatly in what they offer but few more so than finance products, and this is where a relationship with an industry expert can make the world of difference. Yes, interest rates can make up a large portion of what a finance contract will ultimately cost, but once you factor in other key details such as terms, conditions and fees etc it can become something entirely different.
Ultimately, it is far more important to find the right deal that suits your personal objectives and circumstances than it is to be seeking the ‘best’ deal. Whatever that means…
If it’s finance you are thinking about right now, Fox Finance Group is one of Australia’s leading personalised financial service organisations. We have spent many years getting things right so that you can rest assured that you are getting the ‘right’ financial advice available on the market today.
We work for you, not the banks, plus we can have a loan pre-approved ready to go the same day!
If you are keen to learn more or you are ready to act now, you can contact us on 1300 665 906 or you can get started here.
After graduating year 12, Dan began his banking and finance career at Westpac Banking Corporation in Brisbane in 1988. He worked for the bank for seven years, excelling in his career and working his way up to management.