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Cheap Doesn't Stack Up

Originally this article started off as being an explanation of how appliance repairs was a far more environmentally friendly option to replacement but, as we wrote the piece, it became more evident that we had to first explain what we have had to explain to hundreds of people over the past few years.

It then struck us that we had never actually explained this in a single, simple and contrite piece, so here it is.

Modern living is a pain at times, we have all this stress of work and family with seemingly never enough hours in the day to do much of anything. It is therefore quite frustrating when an appliance breaks down, it causes an upset in the domestic space with very often some considerable disturbance to the daily routine.

All too often the temptation for many people as we are bombarded with TV and press advertising all day, every day proclaiming lower prices is to simply take the option of replacing the machine as, after all they're cheap.

Well actually that's simply not true.

Good domestic appliances are not cheap and cheap ones are not good.

So we often have people telling us that, since their machine is a good few years old that they will simply buy another as, they think, that a repair will cost over £100 and that is half the cost of a new one. Well that's true, somewhat. The problem with it is that the machine that you would replace the one you have with is not the same quality at the same price you buy on today for as you paid for the old one.

We realise that may seem a bit confusing but let us try to explain it.

You buy a machine is, say 1997, for £299 for a 1200rpm washing machine. In 2007 ten years later, the same specification of washing machine (or as near as makes no odds) costs you £230, so that's a price reduction in real terms of a shade less than 25%.

That's 25% less than you paid, ten years ago!

Now factor in inflation over that period. Thankfully, inflation has been running at a pretty stable 2% for the past decade so we add 2% per year to the original price which is compound year on year and you end up with what the original machine should have cost you today. This comes out at £364 and a few pence. This is probably low as the rate has been slightly higher over the period but, for the purposes of illustrating the point I'll keep it at a simple, flat 2%.

So now the new machine, at £220 looks a bit cheap doesn't it?

It should, it's almost a whopping 40% cheaper than it should be if it was the same quality as you bought ten years ago.

  Appliance Magic

You should by now, if you have any common sense, be wondering how this remarkable saving is achieved. Stop think about this for a moment.

Have the prices of the raw materials reduced, well no, they've actually gone up in price and steel especially has increased in price.

Manufacturing process have gotten better? Perhaps a little but most components are bought in from specialist producers, especially timers, control modules, motors and the likes.

Has the cost of transport reduced? Well again, no it's increased.

Have labour costs dropped? No, but some production has moved to less costly places in terms of labour, but then the transport costs rise.

Packaging costs? Yes, these have been reduced by replacing proper packing with polystyrene edges and plastic wrap.

However you want to slice it and however you want to look at it and there is a myriad of other examples of things to look at but there just isn't an obvious way by which these cost saving have been made that would allow for a 40% reduction in price, it is simply seemingly impossible. So is it magic then?

No, it isn't magic but it is we suppose an illusion of sorts.

Quite simply the quality is engineered out in favour of cost. That is to say that instead of designing to a quality many low cost modern appliances are designed to a cost so that they can meet retail price points so people buy what they think is a bargain when it's not really; it's just throw away rubbish.

  The Old Cheap -v- Expensive Argument

Every now and again we get someone in the forums that will tell us, as if we haven't heard it before and that for some reason we apparently need taught despite our experience in the industry, that buying a cheap throwaway machine that will last a few years is preferable to buying on that will last. So, let's get a couple of things sorted out before we go any further, we don't really care if you ignore our advice as if you choose to buy some rubbish machine and breaks more often than a decent one we recommend you need us to repair them, quite often in warranty. If you buy an expensive on and it breaks down, you call on us to put it right. It makes no difference to the repairers.

The simple fact is that a machine that is engineered properly means less hassle, less days off work and all too often a lot less cost. On top of that though it's an awful lot less damaging to the environment as the environmental cost of producing a new machine, shipping it and all the rest as well as the disposal of the old way just dwarfs any benefit gained from a more efficient replacement by anyone's figures.

But let's see, one of the recent ones was to replace a machine every two years and we compared it against the old ISE10 which is sadly no longer available but the point is valid:

 ISE10 @ £799A.N. Other @ £200 each
Replacements Over 20 Years 0 7
Cost Over 20 Years £799 £1400

As you can see, cheaper isn't actually always cheaper in the long run, in fact buying a decent machine in the first place can save you a fortune and this is only the washing machine as an example and we don't even include the cost of repairs, disposal of old machines or delivery and/or installation costs. So no, it isn't cheaper to buy cheap machines.

You might not like what this article tells you but it's the truth and the truth is that appliances are big hunks of engineering, steel, plastics and are primarily mechanical devices, the cheaper you make them the poorer the quality becomes. There are few shortcuts in that equation and that old adage applies, you get what you pay for

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