Boiler Replacement Finance Pay Monthly

So what happens if your boiler breaks down, and the cost to fix it is going to be more than you can afford to pay. Well, you could buy a second hand boiler for a few hundred quid if you have that amount of money to spare. But this comes with risks. It's already been used, to what extent you more than likely won't be truly aware of, and it will most probably come with no warranty. Or, at most, a very short one.

Add to that the potential extra cost to install the used boiler, and in many ways it can make more sense to just buy a new one. If you have the money that is. Most companies include boiler installation as part of the deal if buying brand new boiler and paying the full amount in one go or monthly as part of a finance package.

Pictured: An older Vaillant Boiler

Of course, as I'm sure you are aware, new boilers are not cheap. There are some cheap models out there for sale, but they are usually cheap for a reason. That reason being they are not the best in terms of quality and reliability.  Best to go with a well-known, trusted brand like Viessmann, Baxi,  Potterton or Worcester Bosch. Vaillant are pretty good also.

High-end Thermostats can be expensive enough to replace, but boilers are on a whole other level. You're looking at £1000+ minimum, right into several thousand pounds for a brand new, good quality domestic boiler with fitting included. So its understandable that many people who are in need of a replacement boiler would welcome the opportunity to purchase one on finance and pay an instalment each month.

I should point out, that to get a boiler on finance, or for free via Government Grant (read more about that below) your old boiler does not have to be broken. It could still work but have some niggling faults that may make it a bit temperamental when in operation. Or it could be old enough where you feel it needs replacing / updating. So what options are out there. Can you get a new boiler for free?

Government Grants

You can get a new boiler for free in the form of a Government Grant, but you have to qualify. Some of the criteria needed to qualify for a free boiler, is that you must be claiming sufficient benefits (some of those include Working Tax Credit, Income-Related Job Seekers Allowance and Universal Credit), are either the property owner or occupant, and the boiler already in the property must be old enough to warrant a replacement.

This is, at this time, a minimum of eight years old. There are exceptions to this rule. If your boiler has a few niggles which make it temperamental to use, a person can still apply for a new boiler grant if the current boiler is between five and eight years old. This is subject to an inspection by a qualified gas engineer, who will make the decision as to whether the boiler needs replacing with a new one or not. Oil based systems are also covered under this initiative.

Pay Monthly Finance

Many of the big companies offer a pay monthly service. Some have better deals than others, and almost all of them can tailor a deal based on a persons income, type of home they live in, what package they want to buy, and heating system already installed in the residence.

Factors like credit score rating, how much a person earns, time lived in the property, deposit amount (the bigger the better, but no deposit is also available) and the payment plan length you choose (how long you need to pay it off - 2 years, 10 years etc) will all be considered as part of the risk assessment. And depending on how much the package comes to that you want to buy, the company will make a decision based on the factors above. Being accepted into a pay monthly option is subject to approval.

Remember: This is a loan after all. So they have to weigh up the risks. But in fairness, some lenders have been known to be quite relaxed, especially with a bigger deposit being put down (rest paid off monthly), and even with individuals who have a fairly bad credit rating score. So it is worth filling out the application and getting a quote even if you think they won't accept you.

At the time of writing this post (it is subject to change) the typical pay monthly scheme payment options offered by many of the big companies are quite standard in terms of what they offer, interest rates etc. If you only need two years to pay off the loan for the boiler, many companies offer a zero % APR interest rate.

That means you don't pay anything on top of the original price for the boiler + installation. In many instances this offer also requires no bulk deposit. But such offers can be quite fussy about your credit rating, particularly if trying to purchase from the bigger energy companies.

However, if you need longer to pay, like between 3 to 10 years, the interest rate generally jumps to between 5% - 15% APR (this can be higher, but the percentage figure is usually fixed). As mentioned above, this is fairly standard throughout the industry. The longer you need to pay, and the smaller your payment amount each month, the higher the total amount for the boiler will turn out to be.

Cheap, Long Term Pay Monthly

This brings me to some of the other deals you may have seen on the Internet, where, like the bigger, more well-known companies, some lesser known set-ups also offer pay monthly boiler program schemes which have payback options that stretch over a 10 year period, with monthly payment prices as low as £10, £12, £17 and £20 per month.

These sound great, and in some ways they can be a godsend for households with a very low income that could no way afford to either buy a new boiler, or pay a higher amount each month in order to take advantage of the zero interest offers available.

However, the purchaser must be aware. Thanks to the added interest + the sheer amount of time involved, paying back such a small amount each month will give the boiler a much higher total price once all payments are made, and it will take many many years (up to a decade in some cases) to pay off the boiler loan in full.

As an approximate example: Lets say a person bought a boiler from one of the many companies offering a pay monthly scheme, and the initial cost quoted was £1500. The person wants to pay off this amount over a ten year period.  With no deposit required, at the fairly standard 10% APR interest rate, the person would end up paying around £20 per month for 10 years. The total cost would be around £2400, and the interest paid over the 10 year duration would be somewhere in the region on £900.

Pay close to double the £20 amount each month, and you can slash the total interest paid considerably. Still, both of these deals are not too bad for low income households, as its an affordable amount to pay. But a lot can happen in 10 years, and that's a long time for a person to have a payment plan hanging over their head.

Warranty Length + Repairs 

There are other things to be aware of too. One of those being the warranty length offered. You see, if you need a 5 year or 10 year payment plan for the finance of a new boiler, but the warranty length, which can cover parts, labour or both, is only valid for 24 months (2 years), if anything goes wrong with the boiler after the warranty period has expired, who do you think has to pay to get it fixed. Of course, the householder. I.e, the person who has the payment plan on the boiler.

If you only need to 2 years to pay off the boiler (higher payments each month), then you are good to go if the warranty length is only 2 years and covers parts and labour. But if you need 10 years to pay for the boiler, and the warranty is only 2 - 3 years on the package you want to purchase, this can be a problem.

That problem, is more money outlay. It can end up being very expensive. So if you do decide to get a boiler on finance, be sure to go with a package where the warranty length (preferably with parts and labour included) covers the whole time period of your payment plan. That way if anything does go wrong you don't have to shell out any more money for repairs. There may be an engineer call out fee to consider, though, so that's something to be aware of also. But that should be minimal in comparison to the price of parts and labour should repairs be needed.

Gas Safe

Other things worth considering when looking for the best finance deal. Most include free installation included in the price. If your system runs on gas / LPG be sure the person fitting the unit is Gas Safe (holding a gas safe register membership card).

They most definitely should be if you take out your finance plan with a reputable company. Also, is a clean of the system (a power flush) included in the price. This ensures the system is clean and clear of any dirt and obstructions which may affect the performance of a newly fitted boiler. And lastly, do they take away your old boiler for free.

Middle Men Websites

Side note: Also worth being aware of, if using "some" (not all) of the lesser known websites offering this type of service. A lot of these entities are basically comparison websites, where they earn a commission (a percentage of the sale) for each person they refer.

In most cases, they are not the people you would need to contact if something goes wrong, or if you have a query about your new installation. Not all of them are like this, but more and more of these types of comparison websites are popping up thanks to the attractive commissions that can be made by referring new customers to the pay monthly scheme.

Sometimes its best to go straight to the source, so you know exactly who you are dealing with, rather than through a middle man. Or in this case, through a comparison website that does not make it clear what company you are taking out your deal / loan with. Read through their documentation thoroughly, and make sure they list who their lenders are, and who they use to supply and fit (is it all in-house or outsourced) the boiler before committing to a legally binding contract. Just something worth considering.