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Shopping -
Everything Else
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Written by Omie Ismail
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Friday, 04 September 2009 10:05 |
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Gyms have made a mint on automatic monthly withdrawals coupled with member non-attendance. The vast majority of people get on these monthly plans for $19, $29, $39, or even $120 a month! It doesn't seem like much (ok $120 a month seems pretty damn un-cheap to me). Oftentimes gyms don't even mention that they have annual or multi-year plans that can save you a bundle. Not too surprising given that 70% of Americans live paycheck-to-paycheck.
Last year we went to a well known health club that was offering unlimited gym access for just $1 a day or $30 a month. Seemed like a pretty good deal since it was $40 before, but I told the guy, "I don't want to pay monthly, I want to get a year or two in advance". He kind of looked at me strangely since he had spent so much time selling me on the benefits of monthly.
"You want to pay in advance?!?" he said as he raised his brow. He then proceeded to flip over his little rate card and then and stated, "well I've got great news, if you buy 18 months, I can give you 18 months for free! And if you are switching your wife over to this same plan we'll give you 6 personal training sessions for no charge and no initiation". The initiation charge is always a laugher no matter which industry you are dealing with. I thought about negotiating it further but I did some quick mental math and this was something like 55% off the monthly plans. "Can I get one of those super expensive protein shakes with that" and the deal was done.
Just like anything else, when you come with cash and are buying volume you get big discounts. The salespeople love this stuff because many times their comp plans either payout over time or are lower for monthlies. Sign up two people for 3 years and they are getting a nice commission and you are getting a great deal.
Some parting thoughts:
- If you are planning on moving, and your health club isn't going to be in your new location, you might not want to do the pre-pay option or look for a shorter time period.
- You might think that by having monthly fees, you are going to cancel it if you don't use it. This rarely happens and the health clubs no it. Also, some of them still have minimum 1 year commitments.
- If you get a deal like the one I mentioned above, you would have to get a 65% interest rate from the bank to make pre-payment not worth it. Oh, and that would be assuming you had a zero income tax rate on that interest.
- The only time that you would not want to pre-pay is when the cash you would be using might be needed in the next 3 to 6 months. Hence the reason why nearly everyone chooses the monthly option.
- Lastly, Pick a gym that you are actually going to go to and utilize. If the lowest priced gym is so packed that you hate working out, it becomes a very expensive membership.
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