If you’re considering buying new windows you know it can be a considerable expense. In my company our average replacement window order is over $10,000 and sometimes up to $30,000 or $40,000. That’s a pretty big amount to be laying out so you might be wondering if you should finance new windows rather than paying in cash.
You’ll see most larger window companies will offer some sort of financing. This usually comes with promotional plans like 0% for some amount of time, or fixed rates or deferred payments. Are those options a good deal? Usually they are, but sometimes they’re not.
Sometimes customers tell me that they don’t want to finance new windows and they only pay cash. That’s completely fine, nobody is unhappy with that. We do also know that some folks have several projects going on, a lot of money going out the door. Financing new windows, especially at 0% can be an attractive offer.
With a fair financing program you can spread out the costs over time to make the windows more affordable and get the new windows sooner. It can be a win-win scenario.
So is it a smart move to finance new windows?
The answer there depends on the financing offer. For example, right now my company is offering 0% for 12 months with $0 down to finance new windows. This will change over time but that’s the option available as of today and that’s a pretty good deal. (send us a message to get the current promotions)
There’s no interest or finance charge or anything. The 12 months doesn’t start until the windows are installed. If you like the idea of spreading out your payments this is a great offer.
There are companies out there offering subprime type financing for home improvement projects and that’s generally not a great option. If you’re seeing interest rates of 10%, 15% 20% you might want to look for another option.
Some companies even have in-house financing departments. They’ll often times use a different name so you don’t know that the same person owns the home improvement company and the financing company, but they’re out there and usually not the best deal around. If it’s a bank you’ve never heard of then I’d be cautious. They’re not all bad, but some aren’t great.
Some companies offer longer term financing, how does that work?
That’s where things can get a little tricky. For example, we could offer 0% for 48 or 60 months like you’ll see advertised from some window companies on TV. The important thing to keep in mind is that nothing is free in life. Those long term plans will come with higher costs to the comampny which leads to higher prices.
If we were to offer 0% for 60 months that could easily cost us 20% of the total contract amount. That would be pretty substantial and maybe not such a great deal for you because we’d need to raise our prices in order to offer that.
In a scenario like that a $10,000 order would have a $2,000 financing cost to the company. They won’t be able to absorb that cost so the order that would have been $10,000 will now be $12,000 and the salesman will focus much more on payments than on interest rates or total cost. Paying $2000 additional to get “0%” financing is not the best deal to put it lightly.
Typically a plan that was longer than 18 months or so will come with some interest rate and as long as that’s a reasonable rate then it’s a perfectly fine deal. It’s actually more transparent that way because the rate is not hidden in the cost of the windows.
Should I get a cash discount?
We’re going to be writing a whole post on cash discounts soon so stay tuned, but the short answer is no. If you’re offered one price for cash and another price for 0% financing then you’re not really getting 0% financing, the finance charge is the difference in the two prices and advertising that as 0% is a little deceptive. Spoiler alert: Window companies can be deceptive so watch out.
That’s why we don’t advertise or price our products like that but that doesn’t stop many companies from pricing their products that way . It’s tricky and it happens all the time and you should watch out for it.
What does it cost a window company to offer financing?
Not that much for most plans. For example, my company also accepts all credit cards and the financing programs cost about the same as accepting a credit card. It’s just a cost of being in business and basically every larger company will offer financing. It leads to more business over the course of a year. Ultimately it would cost us more money to not offer financing when you factor in the lost orders.
Sometimes people think the price should be lower if they pay by check vs credit card because the company does need to pay a fee to accept a card or to use financing. That’s true but only for the smallest of companies. As our business got larger and larger we found that dealing with checks was a real hassle.
Someone needs to make sure the checks are the right amount, that they get to the bank on time, someone needs to deal with it when they bounce and then we need to do it all over again when the project is completed and the final payment is due. That can be a bit of work, someone needs to get paid to do that so it’s not free. Accepting checks comes with a cost too so I wouldn’t expect a price difference between cash and credit card from a larger company.
Some companies will intentionally price their products high and plan to offer a discount. During the sales process the salesperson will be looking for what motivates you. If you’re a school teacher or a veteran or a first responder he’ll likely have a “school teacher discount” or “first responder discount”. It’s not real, just designed to make you feel special.
If you’re making a big deal about how you’re going to be paying cash it’ll be a cash discount. The idea is to make you feel special with the name of the discount. You would have received that discount no matter what as it’s part of his closing process and the goal is to make you feel like you’re getting the deal of the century even though you’re getting the same deal, or a worse deal, than everyone else. Those door to door sales guys can be pretty good so watch out.
Why don’t all companies offer financing for new windows?
All larger companies do, but often times small outfits don’t. The banks will have requirements that the companies need to meet in order to offer financing options.
Small companies won’t qualify (even if they don’t look small). Also owners with bad credit won’t be able to offer financing.
For example, if they declared bankruptcy last year and just reopened with a new name they might look and sound great, but the banks won’t want to deal with them. They won’t be able to offer financing. Spoiler alert: this happens more than you might expect.
I’d say whether or not you end up using the financing, just the fact that it’s available tells you the company is at least a little more substantial than some others.
How should I decide whether or not to finance new windows?
I’d make sure you understand the financing offer that is available to you. Make sure you understand what the payments will be and be confident that they’ll fit into the budget. Companies may offer multiple options so it’s worthwhile to ask questions if the option presented doesn’t seem like the right fit.
If the options they offer to finance new windows come with a high interest rate, say over 12% or if they’re playing games with cash discounts and the numbers keep changing then you’ll want to try to nail down what the final offer is.
Usually any reputable company will make the pricing and the payment options very clear. If you feel like a company is being slippery with the info or the options it’s probably best to look elsewhere.
If the offer seems like a fair deal, fits into the budget and the pricing and financing info are clear and easy to understand then financing new windows can be a great deal.
So, what’s the bottom line?
Don’t get distracted by the super special discounts or silly claims by salespeople. Understand the choices and if you’re not sure if they’re making you a decent offer, compare with someone else or get a quote from our company and ask our rep any questions that you’d like.
To find our company or other recommended companies in your area check this section. You can also find window reviews here and information about the tricky window sales tactics that many companies uses here. We hope you enjoy the site!