Apathy hits New Zealanders in the back, with nearly 90 percent paying a “lazy tax” on financial products, according to a study.
“Lazy taxation” is the price paid for not shopping, negotiating and getting the best deal on everything from electricity and gas to home loans and cell phone plans.
In a survey of more than 2,000 people, the financial comparison and research site Finder found that 87% of them thought they were getting good value for money on at least one service, but that they hadn’t changed in the past six months.
Income protection insurance, auto loans and personal loans were the products most likely to incur a lazy tax, followed by home and auto insurance (43% and 35% respectively) and broadband (35% ).
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However, New Zealanders were less likely to stay on a cell phone plan that they didn’t think was good value, with just 27% paying a lazy tax on that bill.
The survey found that only 13% of New Zealanders pay no lazy taxes.
Men were more likely than women to pay lazy taxes on their home loan (36 percent vs. 30 percent), while Gen Z was most likely to pay for personal loans (64 percent) and loans real estate (60 percent), compared to 38% and 28% of baby boomers respectively.
Finder New Zealand editor Angus Kidman said it was shocking that so many people missed out on a better deal.
“Laziness rarely pays off in life, and it’s no different with your finances. Being complacent often leads to a worse situation, ”he said.
“Rummaging and comparing suppliers on a regular basis should be second nature, not just when you first get the product. “
Getting a better deal on banking products like a home loan could be as easy as calling the lender to negotiate a lower rate, especially for those with good financial records, Kidman said.
Data showed that a third of credit card holders were paying lazy taxes, including 54 percent Gen Z and 30 percent Baby Boomers.
While the average credit card interest rate was 19.4 percent, some cards had rates as low as 9.95 percent, Kidman said.
“Loyalty doesn’t pay with your credit card provider. If you haven’t revised your rate for a while, you’re probably paying more interest than you need to.
Another way to save money for those with credit card debt was balance transfer offers.
The offers allow customers to transfer existing debt to a new card with a low interest or no interest period, giving them time to pay off some or all of the balance at low cost or at no charge.
A similar number (35 percent) were paying lazy taxes on their auto insurance.
Auto insurance policies ranged over $ 1,000 for the same car, location, and driver profile, according to Finder’s analysis.
“Auto insurance policies can vary widely in terms of price, which is why choosing the right insurer and the right policy is so important,” Kidman said.
“Be selective about what extras you really need, but don’t skimp on coverage.”
Drivers could also lower their premiums through pre-purchase research to find out which cars were the cheapest to insure.
“The make and model of your vehicle can have a huge impact on your premiums. This is because some cars are inherently safer and cheaper to repair.
“Reckless driving can also impact your driving record and claims history, which can impact your premiums. Safe drivers usually get the best insurance deals.
Some insurers also offered loyalty discounts or offers for new customers, as well as discounts for purchasing an online policy.
Half of those with personal loans thought they weren’t getting good value for money, but hadn’t changed providers in the past six months.
Younger generations were more likely to think they were being scammed by their lenders, with two-thirds of Gen Z borrowers paying lazy taxes on a personal loan, compared to 54% of Millennials, 51% of Gen X and 38 % percent of baby boomers.
“The interest rate on your personal loan is based on a series of factors such as your income and borrowing history, so not everyone may be eligible for the lowest rates in the market,” said Kidman.
“But that doesn’t mean you can’t get a better deal on your loan. For example, if you took out your loan before interest rates fell last year, you may be able to switch to a cheaper rate.
Kidman said personal loans could be a convenient way to pay for things like a wedding or home renovations, but should be approached with caution.
“You have to be sure that you will be able to pay your repayments while meeting basic expenses.
“And beware of payday loans – these are quick, short-term loans with sky-high interest rates that can make it difficult to get out of debt. “