Boiler finance: is 0% actually free?

Most installers offer finance, and some of it genuinely is 0%. But 0% APR does not always mean you pay the same as a cash buyer, and the monthly figure is designed to be the number you look at.

Look at the total amount repayable

It's on every credit agreement, by law. It is the only number that matters. £45 a month sounds like nothing. £45 a month over 120 months is £5,400 for a boiler that cost £2,800.

Compare the total repayable against the cash price of the same boiler. That difference is what the finance costs you, whatever the headline APR says.

Real 0% deals exist

Manufacturers subsidise them to shift boilers, usually over 2 to 4 years. If the total repayable equals the cash price, it's genuinely free money and you'd be daft not to take it.

The longer deals, 8 and 10 years, are almost never 0%. That's where the interest lives.

Questions to ask

What's the total amount repayable? Is there a deposit? Is there an early settlement fee if I pay it off? Is the cash price the same if I don't take the finance?

That last one catches people out. Some installers price the finance deal in and won't discount for cash. Some will knock a few hundred off. You only find out by asking.

The obvious point

Finance is credit, it's subject to status, and a missed payment affects your credit file. It's a perfectly sensible way to spread the cost of something you need in January. It's a bad way to buy a boiler you don't need yet.