The True Cost of Your Wish List
When small business owner Kevin Schimelfenig finally examined his smartphone bills, he was shocked to find the true cost of his indispensible BlackBerry Storm — he uses it to email, text and call clients all day long — was about 25% higher than the price he was quoted for the plan. Schimelfenig, founder of a medical-device marketing firm in Cary, N.C., says the extra fees totaled $1,400 over the last three years.
Buying things may be getting cheaper ($139 for an Amazon (AMZN: 174.71*, -1.58, -0.89%) Kindle, about 47% less than six months ago), but owning them isn’t. Taxes and fees on cellphone plans, assembly and repair costs on home appliances, and hefty financing fees on cars can now add up to more than 50% of the sticker price of a big purchase, according to SmartMoney.com estimates. And these fees are rising as states increase taxes on cellphone plans and consumers hold on to home appliances for a longer time and spend more on repairs. “The cost of ownership is going up on most consumer electronics and devices,” says Linda Sherry, director of national priorities at Consumer Action, a consumer advocacy group.
In all of these niggling little ways, consumers keep paying for things, long after they’ve ostensibly bought them. What’s worse, buyers rarely take into account these financial ripple effects, which can add up to thousands of dollars and sometimes make the item they’ve purchased less affordable. “The result is a real budget buster,” she says.
And the costs of ownership are on the rise. The monthly taxes and fees tacked on to service bills are at a 15% rate, up about 2% this year and expected to rise again next year, according to CTIA-The Wireless Association, a trade group. The average cost of a smartphone app is up 43% in the last year. And gas prices are up 9%, insurance another 5%. That’s not to say consumers haven’t noticed: The number of people canceling their lease agreements because of unexpected expenses — like higher insurance or maintenance costs — is up 150% this year over last year, according to LeaseTrader.com.
Of course, sometimes there’s no real alternative. Renting a smartphone or a home appliance doesn’t make much sense today; and there are few alternatives paying to replace worn out brakes and tires on a car. But that doesn’t mean ownership has to be quite as expensive as it has become. SmartMoney did an analysis of five bigger-ticket items, their true cost and easy ways to keep the money faucet to a trickle. Here’s what you need to know.
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com