DO you know that 81,125 households in Fiji purchased goods on hire-purchase during the period January 1997 and June 2011?
The Hire Purchase (HP) report launched by Consumer Council in July this year revealed that about three quarters of the HP consumers had incomes less than $15,000 per annum.
The joint family incomes of a vast majority of HP consumers (70 per cent), as shown in the table below, were in the less than $20,000 category.
Eighteen per cent of the HP consumers had their own homes while 82 per cent stayed in rented accommodation.
In terms of education, 70 per cent of the HP consumers had no post-secondary school education.
Forty-seven per cent of the consumers, however, had members of their families who had tertiary education.
While age is not an important feature in the HP propensity, for the record, 31 per cent of the HP buyers are below the age of 35; 36 per cent are in the age group 35-45, while a third are above 45.
As the table below shows, in 18 per cent of all purchases, children were the main advocates.
Parents of the household heads formed 12 per cent of the principal advocates.
In the remaining cases, the husband or the wife in the household formed the principal advocate for the purchase.
The main reason cited for the purchase decision was convenience, with 65 per cent of the purchases citing this as the main reason.
Another 8 per cent cited time saving as the principal reason.
The table below shows extraneous factors — like pressure from family, demonstration effects etc. — comprised 26 per cent of the purchase decisions.
The council urges consumers to buy items based on your affordability and not just a desire to have the item which is being offered under zero deposit.
As a responsible consumer, you must analyse your financial status before committing to buy items on hire purchase.
You must ensure you can meet your monthly or weekly payments without any difficulty.
Therefore, your monthly or weekly installment must be treated just like your water or electricity bill.
This is your expense which must be budgeted and treated with urgency so that you can own the goods bought under hire-purchase.
If you do not understand how hire-purchase works, get your more educated friend or relative to explain the financial commitment and consequences of defaulting payments.
Don't trust the salesperson or the advertisement you see or read.
You must shop around to get the best interest rate with low charges for transportation, freight, insurance to name a few.
Also check which HP company is giving you longer manufacturers warranty so that you don't have to buy extended warranty.
You only buy the item if you really need it and if it helps in making your life easy — not because your neighbour or relative has one.
Pressure from the family or falling for enticing advertisements should not be the reason for your purchase.
Your purchase decision must be based on your ability to meet your financial obligation.
So be smart and act responsibly.
* This is a regular column from the Consumer Council of Fiji. Email: email@example.com for feedback.