Majority of New Zealanders pay “lazy taxes”
New Zealanders find apathy in their pockets, as studies show that almost 90 percent pay “lazy taxes” on financial products.
Lazy tax is the price paid for not rummaging around, bargaining, and getting the best deal on everything from electricity and gas to home loans and cell phone tariffs.
In a survey of more than 2,000 people, the financial research and comparison website Finder found that 87 percent thought they weren’t getting value for money on at least one service but hadn’t changed in the last six months.
Income protection insurance, auto loans, and personal loans were the products most likely to result in a lazy tax, followed by home and auto insurance (43 percent and 35 percent, respectively) and broadband (35 percent).
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However, New Zealanders were less likely to stick with a cell phone tariff, which they felt was not cheap, as only 27 percent paid lazy taxes on the bill.
The survey found that only 13 percent of New Zealanders don’t pay lazy taxes.
Men were more likely than women to pay lazy taxes on their home loans (36 percent versus 30 percent), while Generation Z was the most likely to pay personal loans (64 percent) and home loans (60 percent), compared with 38 percent and 28 percent of baby boomers, respectively.
Finder New Zealand editor Angus Kidman said it was shocking that so many people were missing out on a better deal.
“Laziness seldom pays off in life, and your finances are no different. Complacency often makes you feel worse, ”he said.
“Regular shopping and comparing sellers should be a matter of course, not just when you receive the product for the first time.”
Getting a better deal on banking products like a home loan could be as easy as call the lender to negotiate a lower interest rate, especially for those with a good financial history, Kidman said.
The data showed that a third of credit card holders paid lazy taxes, including 54 percent of Generation Z and 30 percent of baby boomers.
While the average credit card interest rate was 19.4 percent, some cards had interest rates as low as 9.95 percent, Kidman said.
“Loyalty doesn’t pay off with your credit card provider. If you haven’t checked your tariff for a long time, you are probably paying more interest than necessary. “
Credit transfer offers were another way to save money for those with credit card debt.
The offers allow customers to transfer existing debts with a low or interest-free period to a new card in order to have time to pay off part or all of the balance cheaply or free of charge.
A similar number (35 percent) paid lazy taxes on their auto insurance.
According to Finder’s analysis, auto insurance policies varied by more than $ 1000 for the same car, location, and driver profile.
“Auto insurance policies can vary widely in price, which is why choosing the right insurer and policy is so important,” said Kidman.
“Be selective about which extras you actually need, but don’t skimp on your cover.”
Motorists could also lower their premiums by researching which cars are cheapest to insure before buying.
“The make and model of your vehicle can have a huge impact on your rewards. That’s because some cars are inherently safer and cheaper to repair.
“Reckless driving can also put a strain on your driver’s license and your claims history, which can affect your premiums. Safe drivers usually get the best insurance offers. “
Some insurers also offered loyalty discounts or offers for new customers, as well as discounts for taking out a policy online.
Half of personal borrowers thought they weren’t getting good value for money but hadn’t switched providers in the past six months.
Younger generations were more likely to believe they were being ripped off by their lenders, as two-thirds of Generation Z borrowers pay lazy taxes on a personal loan, compared with 54 percent of millennials, 51 percent of Generation X, and 38 percent percent of baby boomers.
“The interest rate on your personal loan is based on a number of factors such as your income and borrowing, so not everyone is eligible for the lowest interest rates on the market,” Kidman said.
“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 handy way to pay for things like a wedding or home renovation, but should be approached with caution.
“You need to be sure that you can make your repayments and still afford the basic cost of living.
“And be very careful with payday loans – these are quick, short-term loans with exorbitant interest rates that can make it difficult to get out of debt.”