Pay Monthly Boilers: Are They Worth It?
What is a Pay Monthly Boiler?
With a Pay Monthly boiler scheme you avoid the bulky upfront cost of installing a new boiler, which is usually in excess of £2,000. Rather than part with all the money at once, you agree to make an affordable, single payment every month over a set period of time. In return you will have a brand new, A grade efficiency boiler installed in your home.
As long as you make your payments for the duration of the contract, you won’t need to pay anything else. An engineer will visit once a year to carry out a service and make sure everything is running smoothly. If anything does go wrong, an engineer will fix it free of charge. If the boiler is broken beyond repair, you get a brand new replacement. And, at the end of the contract, the boiler belongs to you.
Benefits of a Pay Monthly Boiler
No upfront costs
There’s no need to take out loans or scrape together money that you just can’t afford. It’s the main draw of these schemes and takes a huge pressure away at a time that is already stressful i.e. no hot water or heating. If you’re really pushed for cash there are some schemes that offer Buy Now Pay Later as an option so you can give yourself even more breathing space.
Monthly payments can be as low as £35 per month depending on the length of the agreement and whether you can afford to put down a deposit.
With no need to delay as you try to save the money you can get your heating back up and running far quicker.
Contract period to suit you
While many schemes offer contracts of up to 12 years, there are some that offer a bit more flexibility and let you choose a shorter contract of 3 or 5 years. This means your monthly payments will be higher, but you’re not committed for as long.
Cheaper energy bills
By replacing an inefficient G rated boiler with a modern, A grade boiler you could save up to £305 a year in annual energy bills*. If you consider this as a monthly saving of £26, it might cancel out the cost of your boiler payment.
No surprise costs
Your monthly payment also includes the servicing and ongoing repairs, so you can rest assured that surprise problems are already paid for.
High quality manufacturers
The installer doesn’t want to be coming back to repair your boiler every other month, so it’s in their interest to install the highest quality manufacturers.
Peace of mind
Although boilers usually have manufacturer’s warranty included even if you buy it outright, many are only valid if the boiler is serviced every year which is an extra cost to budget for. A Pay Monthly scheme usually includes the servicing in your payment, so it’s all taken care of.
What’s the Catch?
There are definitely some important things to consider before committing to a Pay Monthly boiler scheme:
To keep the monthly payments ‘affordable’ you usually need to commit to a long term contract, often up to 12 years. That’s not a decision to be taken lightly.
You’ll pay more in the long run
If you add up all the monthly payments that you’ll make over the contract it usually comes to more than the cost of paying for it outright. How much more will depend on the interest rate and length of the contract.
Monthly payments may rise
The amount you pay each month will usually rise with inflation each year. Also, some contracts may advertise a low initial payment that then rises after the first year, so check the details of the contract.
To qualify for a Pay Monthly Boiler scheme you will need to pass a basic credit check, but the criteria isn’t as strict as other lenders so very few applicants are rejected.
If you move home, beware…
When a contract spans 12 years, it’s not outside the realms of possibility that you will move home in that time. If you do, you will leave the boiler behind and, unless the new homeowners are willing to take on the contract, you will be committed to paying for a boiler you no longer have. You’ll either need to continue the monthly payments or settle whatever balance is outstanding.
Bear in mind that one of the main attractions of these schemes is the peace of mind of knowing your boiler is covered if anything goes wrong. However, many boilers include manufacturer warranties of 5 – 8 years anyway, so it would also be protected if you bought it outright.
Is a Pay Monthly Boiler Right For You?
If you have the funds to pay for a replacement boiler outright, it’s still the cheapest way to go.
However, for the many who don’t have the funds at hand Pay Monthly boiler schemes can be lifesavers. If you can get over the fact it will cost you more in the long run these schemes can be lifesavers. They not only make a new boiler more affordable but also mean you can sleep a little sounder. Any nasty surprises like breakdowns are already paid for.
If you think a Pay Monthly boiler could be the right choice for you, send an enquiry to us here at Boiler Guide we can put you in touch with a provider offering finance options on your new boiler.
*Source: http://www.energysavingtrust.org.uk/home-energy-efficiency/boiler-replacement. Figures based on installing a new A-rated condensing boiler with a programmer, room thermostat and thermostatic radiator controls (TRVs) in a gas-heated home from an older boiler with a programmer and room thermostat. Based on fuel prices as of April 2018 for a detached house.