Highlights in this issue:

*** Discover what “fair value” is…
*** Want to save R1,500? Opt for white instead…
*** Looking to save long-term, this little symbol will show you how…

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From the pen of Karin Iten…

Dear Investment Academy Reader,

If you’re in the market for a major appliance, like a fridge, washing machine or dishwasher, good luck. Shopping for one can be a trying process. Being large and expensive in most cases, as well as vital to the smooth operation of your household, this is one purchase you shouldn’t take lightly.

That’s why this week I’ve put together a useful six-point buyer’s guide on what to look for when making this all important decision.

Point #1: Compare prices
The most important thing you can do is shop around. And the best way to do this is to visit a website like www.pricecheck.co.za. Here you’ll discover what “fair value” on the device you’re looking for is. Then, scour the junk mail and knock-and-drop (like the Randburg Sun or the Sandton Chronicle) for special featured deals from major retailers like Macro and Game. By doing this, you’ll know whether the sale item is a good deal or not and where you can pick it up for the cheapest price.

Just don’t forget to compare like products. It’s no use comparing a white standard model Bosch fridge with a double door, ice making black model from LG or Samsung.

And don’t be afraid to ask the sale agents questions and find out whether past buyers have been happy with the product or not. Take your time, even if you don’t intend to make a purchase that day. Another great way to determine which model to purchase is to read online reviews. “In most cases,” says consumer blogger Spencer Ritenour, “other people will have purchased the same item before you did. Their experiences, both good and bad, can offer an invaluable insight into the performance you can expect, whether it is prone to breaking down, and possible interactions with the manufacturer.”

Point #2: Do you need all the frills?
These days just about everything you purchase comes with “optional” extras and fancy gadgets. But are they really necessary? That’s a question only you can answer and you need to consider this when comparing prices. Decide how important extra frills and features are. Most home appliances have a variety of optional or upper scale features that add onto the cost of the product. While an ice maker on your new fridge or rotisserie oven are wonderful additions to your home, they come with a high price tag.

And remember, the more gadgets your appliance has, the more finicky it will be and the more likely something will go wrong. If you’re looking for reliability, it’s often best to go with a standard model rather then a fancy one.

Point #3: Colour makes a big difference to the price
These days, appliances come in a variety of colours – the most common of which are white, black and silver. But did you realise how expensive a black or silver model is compared to a white one? Choosing a white appliance, could save you between R1,000 and R1,500.

Point #4: Don’t be shy of haggling
A consumer study by consumerreports.org showed that only 10% of people who buy new appliances try to negotiate over the price. The success rate: over 75% of those who bargained succeeded.

So how can you increase your chances of being successful? Well, according to consumerreports.org, “effective haggling is part prep work, part attitude.” Knowing what you’re talking about – by doing your homework – will help you negotiate from a position of power. And remember that “paying cash is a good bargaining chip”.

Point #5: Buy the floor model
If you don’t mind minor blemishes (like a purely aesthetic dent or scratch), ask the sales assistant whether or not they can give you a discount if you buy the floor model. Just ensure you understand what the warranty period will be and whether or not the instruction manual is included or not.

Point #6: For long-term savings, consider energy efficiency
According to frugalpig.com, an energy efficient appliance can save you money and also conserve natural resources. When shopping for a new device, considering energy consumption and operating costs is vital. The initial cost is only part of your expenditure; you have to keep an eye on your electricity bills.

But how will you know? To find out whether an appliance is energy efficient or not, look for the EnergyGuide label. This tells how much electricity, in kWh, the appliance will use in one year. The smaller the number, the less energy it uses.

Keeping these things in mind when shopping for major appliances will help ensure you go home with not only what you need, but also something that will serve you well for years to come – without breaking your budget.

Here’s to your financial freedom,

Karin Iten
for the Investment Academy