The life Eve team gets more and more difficult. The longer it takes to get the V out of the oven, the competition is creating new ways to get your products on the market.
Interesting if you want to spread your payments to get a product that’s not as good as the V! ;p
Note that it goes from being interest free to just under 20% APR after the first 2 years. Also, and note I’ve not read the fine print in detail, but it describes this as a lease arrangement, yet you’re paying nearly the full wack over 2 years but won’t own the machine? Then at 2 years you can trade in for a new machine, but presumably you’ll still continue to pay the monthly charge, albeit now with 20% interest added.
At first I thought it was similar to what they call Personal Contract Plans in the car world, i.e. a very low deposit, low monthly payments and then the option to return the car and walk away, part exchange any equity for a new car or pay a (reasonably large) lump sum to own the car outright. Seems like this isn’t the case here since the monthly payments are just way too high.
EDIT: I’ve just had a look at the FAQs and you do own the machine after 24 mths. So on one hand it is essentially an interest free way to pay for a surface which is pretty good. The new after 18 mths bit isn’t so good imo however. After 18 mths of payments you basically send in your machine to MS who will cancel the remaining 6 mths owed and you start a new 24 mth plan (with 20% interest this time). i.e. here I would rather just pay off the last 6 mths and own the device. Surely depreciation isn’t that bad?!
What happens if MS doesn’t follow an 18-month refresh-cycle?
Let’s say I buy a new SP5; 18 month pass but I do not want to upgrade, because now there is just the SP6 out. I’d prefer to wait some more month to then get an SP7 (based on the assumption refresh-cycle is 12m). Can I still upgrade?
And am I not better off buying one of those 18 month old Surfaces MS will sell afterwards?
There’s a window from 18mths to 24 mths where you can upgrade. Beyond that you can’t. However why would you “give away” a perfectly decent 2 year old machine with a few months of payments left to go when you could pay off those few months and own the machine outright. Just doesn’t make sense unless I’m missing something…!
Interesting, it would seem to be a reasonable program to keep customer loyalty, but the benefits seem to be more on MS side they have the money, a 18m old device to resell and then another sale with +20%, minus the 6 months they wrote off.
@Kee, do you know how to calc after what time that added 20% make up for the written off 6 month payments?
@Tomas_Ulicny, sorry, not sure I understand. How I understand it is that last 6 months is paid for by MS, so they would set that off against the resale value of the device handed back and also the profits from the new device sold. The 20% interest would be earned by the financing company, who are separate to MS.
They have 19.99% interest fee in the terms and conditions? What? Are they kidding? I’ve never seen such a ridiculously high interest in all my life. Even 10% are really high here in Germany. For a 2000$ machine you would end up paying over 2400$ in 24 month. And you already payed the first machine nearly full, but after 42 months you own only one device. Sounds… well… uhmmm… not for me.
The only good thing is the interest free arrangement for the first device
Ah ok, understand, it does not travel to MS pockets, rather the financing company gets the 20% bonus and MS is payed the purchase value at once from them, got it.
As said, too greedy… It may have been an innovative approach for MS on keeping customers, by kind of subscription prepayment, but usually you as a customer pay less when summed up which is your benefit and the sellers benefit is the certainty of having a future sale.
Would be neat i think, you pay monthly, summed up less than for a direct purchase (i could be happy with paying lets say 80%) and after lets say this 18 months you get a new device or an upgrade, whatever, and you continue to pay as before…
You will be at the edge of new tech, with having a new spec and fresh device and you pay less than if you would refresh in same periods by yourself, and MS can resell the old machine and have the certainty of a future income… win-win
I think there’s some confusion here. From what I understand the system is thus:
The cost of the machine is divided into 24 monthly payments, with 0% interest. Go over that, and the interest rate increases to 20%. It’s basically the same thing you can do with a big TV at an electronics store, and assuming you pay the installments on time, from what I’ve gathered skimming the site basically costs the same as just buying it outright? (Don’t quote me on that).
There’s also the option to “trade-in” your Surface after 18 months for a new model, which presumably would initiate a new 24 month financing plan. Basically instead of re-selling your Surface for a % of the value, you’re saving a quarter off the price, which I guess might appeal to a certain group of early adopters?
I think the big question is I didn’t see anything about the keyboard/pen for the Surface Pro. If those aren’t included, it would seem to throw a wrench into the value/upgrade proposition if you have to buy that stuff and are then stuck with it come upgrade time.
EDIT: Teal Deer version, this is basically the same thing countless big box retailers do, Microsoft is just cutting out the middle-man.
When you look at the payments it actually gets worse than I expected. A SP5 i5 with 8gb Ram and 256 SSD is list price of 1299 US. For the payment plan with 0% APR is $54.13 a month for 18 months you end up paying almost $975 to “lease” the device. Typically plans like this for cars or cell phones are subsidized and you’d pay a much smaller portion. Phones used to be pay 50% and trade it in after 1 year and get a new device. That I would sign up for. Not this…
Often schemes like this are designed to benefit business with taxation
Back to the original post for the thread, I believe that this is a win-win for both Microsoft and consumers. People can criticize all they like because they do not understand the plan. Of course it will work out more expensive on a monthly basis vs. paying upfront. There are people in my office who are on monthly plans that get upgraded laptops every 36 months. Also think about the potential for students who can’t afford to fork over the upfront cash.
This is an excellent idea that EVE would be financially unable to replicate (unless I’m mistaken).
Microsoft is working with “leasing partners”. EVE could do the same without problems. They sell the device to the “leasing partner” and you give him money monthly. I could even lease a V without EVE. There are leasing companies here in Germany you can lease everything. They buy it (if it is on the market) and you can lease it from them.
The MS leasing plan is targeting primarily the corporate sector (although it might appeal to small businesses too) and makes perfect sense for them. Eve is not targeting that sector. If anything, the MS support for the EVE project proves that MS sees EVE as complementary, rather than a rival. EVE is reaching demanding customers who could never afford MS pricing (but, after having used a V in their private life, will never settle for anything less than a Surface at work). MS is targeting coroporate customers whose procurement procedures and total service and support requirements place them buyond EVE’s reach.
A much better idea imo would be to use this plan for the first 24 mths when it is a set of interest free monthly payments.
Then should you really wish to upgrade, just wait an extra 6 mths when you would have paid it off in full, then take out a loan from a bank where the interest rate would be closer 5% rather than 20%. Don’t forget you own the first laptop, so you can sell that on ebay and put it towards the new laptop, thereby reducing the amount you need to borrow even more.
No lump sum payments this way. Low monthly payments and better financial sense than the MS plan.
And yes, I am writing from a consumer point of view not a corporate point of view.
Agreed. EVE would have a difficult time providing all the extra data protection, backup, and technical support services that come with these monthly plans. Of course EVE doesn’t have to provide all of that and could simply charge a lower monthly rate if it is targeting students, etc. However there must be a reason why the other tech heavyweights have not targeted students with monthly plans.
With respect to leasing partners; I think EVE first has to demonstrate it’s ability to execute production and sales on a sustainable basis before anyone would work with them.