3.The Cost of "Buy Now, Pay Later": Pages 86 - 91
TODAY'S AGENDA: We are learning the cost of "buy now, pay later".
1) Read the brief history of instalment payment plan below.
2) Check out some ads from 1920's on this page.
3) Look at the padlet that illustrates an image of a Mazda model
and compare financing and purchasing prices.
4) Complete pages 86, 87, 88, 89, 90, and 91.
How did instalment payment plan start?
The method of buying large ticket items with a small deposit and instalment payment plan was a feature of the 1920's. Previously only the wealthy could afford to pay cash for items like pianos, phonographs, radios, fridges, vacuum cleaners, and washing machines. Most people who aspired to owning their own home saved up the full price in cash over many frugal years, so they no money left over for luxuries.
Manufacturers realized they could expand their profits if they could grow their markets and so instalment selling was introduced. The increased production volumes reduced the unit cost of items making them more affordable, and easy terms made for easy sales.