How Much Is A Jar Of Marmalade?
Tuesday, 15. June 2010
How much is a jar of marmalade? This is a serious question, do you know? Very few of us know the answer, mainly because there isn’t just one answer. I carried out a little experiment and found that I could buy a jar of marmalade for 69 pence. The most expensive jar I could find was £4.99, that’s a difference equating to 723%. Now not being expert on marmalade, although I do like a bit of thinly cut on a slice of brown toast occasionally, if I walked into a couple of shops and saw that the price of marmalade was ranging from £4.25 to £4.99 I would believe that a fair priced jar of marmalade was around £4.50. Is this a good price to pay? Can you afford it? These are two different questions but they both have to be decided upon before we decide to go ahead with the purchase. Now let’s say that you have heard that there is marmalade being sold in a shop down the road for £1.99 per jar, what do you do? The trouble is that you may buy the cheaper jar and hate it so the jar that you buy at £4.50 has now effectively cost you £4.50 plus the £1.99 = £6.99 – a bloody expensive jar of marmalade. So what has this to do with car finance? Well the fact is that you won’t know the true cost of a lease until after you’ve come to the end of the contract and returned the vehicle in the same way that you won’t know if the marmalade was a good buy until after you’ve bought it. You’ve also got to ask why there is such a large difference in price between jars of marmalade, is it down to the ingredients? Is the cheaper jar packed full of unhealthy cheaper ingredients using low quality fruit? Is cheap labour used? Are the jars filled in less than hygienic surroundings? There are many reasons why there should be such a big difference in the same way that the rates differ to lease the same car. Low rates usually mean low risk with some funders only taking 20% of applicants. Whenever you apply for finance it will add a search to your credit file and will start to increase the risk in the eyes of other lenders if you don’t get approved. As with insurance the more risk you are prepared to take yourself the lower the premium. The same applies to car finance. So as with the jars of marmalade ask yourself why some prices are so much cheaper than others. Price or monthly rate is one thing but the cost is a whole different jar of marmalade. By Graham Hill
