C300: Avoid Canon's 0% Interest Monthly Payments Scam

S

slavikb

Well-known member
Hi folks, I know various remnants of this warning has been posted before by others, but I just want to reiterate in case anyone's considering getting a 24, 36, or 48 month payment plan for a Canon Cinema camera.

It seems like a great deal with 0 percent interest, but in truth you pay probably close to 10% interest in inevitable fees.

First, they automatically charge you for insurance, as well as your local property taxes. So if you carry your own insurance and pay your own taxes, you have to go to considerable lengths to prove it to Canon and have them issue partial or full refund for those fees.

But the real fees come in the form of consistent late charges you can't avoid. The invoices are generated mid-month, you receive the invoice somewhere around the 20th-23rd of the month, and if you write a check and mail it or pay with your bank's Bill Pay, it takes a few days to arrive and a few days to process and 9 times out of 10 the payment is accepted after the due date. Then on the next invoice you owe a hefty late fee.

Rinse/repeat every month.

I've bought both a C100 and C300mkII with this program and will never again buy into the "deal."
 
This has not been my experience with Canon financing at all. I sent them a Certificate of Insurance when I was first informed of the insurance requirement and they removed the insurance charge from my monthly billing. Moreover, I set up an automatic monthly payment with my business credit card so there is no chance I'll get a late payment.

That said, there are some things in the tiny print that concern me - you are not allowed to loan or rent the camera out to another person or company without violating the terms of service, for instance. You also can't seem to pay ahead if you're on one of the leasing options, so right now I'm stuck with 36 months of payments no matter what.

Edit- I definitely wish the insurance requirement had been mentioned prior to me signing on the dotted line but if you're shooting with a camera above $5k, I think having insurance is a no brainer.
 
You can request a buyout on their customer portal. Unfortunately their portal doesn't tell you anywhere how much you have left on your loan, so you have to call and request that info too, before deciding whether you have the cash for a buyout or not.

Andree - the late fee is 10% of your monthly payment.
 
Also regarding Dustin's experience. Yes, you can setup an automated monthly bill pay. However, if it's from your checking account, typically the bill pay will issue a paper check and mail it to Canon Financial Services, and that takes a few business days to generate.

If you're paying from your business credit card, then yes, it is automatic. However, you're incurring credit card interest rate unless you pay off your card each month. That's an ok solution but it seems a bit much to require a Checking -> Credit -> Canon payment stream.
 
I would have to disagree. It's a payment program they offer for those who don't want to flat out buy their cameras. If you take out a loan from a bank, you're basically in the same boat but probably with a higher interest rate. I used this program for my c100 and c200. My insurance company called them and updated my insurance with them, and I pay online every month, so there has never been a late fee. My issues are, like pointed out, I can't see how much is left online for a buyout, so you have to call them. So I called them when I wanted to buy out what was left.
 
My experience with CFS has not been negative either. Quite the contrary. Additionally, whenever I've called them on the phone, I was speaking with a knowledgeable, responsive person within a few minutes. That said, my use case may very well differ from others.

Details as follows: set up lease approval through Pro Video And Tape (they're great), insurance through Athos, Certificate of Insurance to the appropriate underwriter for verification (can't recall who right now, but it was a simple email and it took two days), called CFS to confirm all good with insurance, auto-pay monthly credit card (paid off monthly as I refuse carry consumer debt). No sweat.

Regarding the fine print, I chose not to include the option to rent to others in my insurance policy. I mostly use my gear for personal projects as I earn a living doing other things in the film industry and prefer not to rent out gear if I'm not operating the job. That's me, however and perhaps not so common.

Provided a person walks into the Canon Financial Services situation with their eyes open and engages proactively as opposed to reactively, seems like a good way to build a little equity over time.

Naturally YMMV.
 
slavikb said:
Also regarding Dustin's experience. Yes, you can setup an automated monthly bill pay. However, if it's from your checking account, typically the bill pay will issue a paper check and mail it to Canon Financial Services, and that takes a few business days to generate.
Click to expand...

Why wouldn't you set up the check to arrive a few days earlier? I assume payments would be the same each month, so you wouldn't need the invoice before paying. Even if the payment isn't exactly the same amount each month, you could just pay a little more each month to ensure you've never under the amount owing.
 
Yes of course there are ways to get in front of the late charges. If there wasn't a way to avoid the late charges at all, then it would be public knowledge that CFS is a bad deal.

Paying by credit card, paying ahead, or simply paying for your Canon gear without ever opening a lease with them - all ways to get around the late charges. But that's not the point. The point is that from the get-go the CFS lease defaults to screwing you, and then it is up to you to spend the time and effort to avoid getting screwed again. That to me is incredibly scammy and why I'm recommending people avoid it.

And by the way, I would assume that sending a payment to Canon before an invoice is generated would fail from time to time, because the payments are not actually the same every month (your insurance, property tax, and late fees popping up when you don't expect them). Plus, you're required to memo your Invoice number when sending a payment. If you send a payment without knowing the invoice number, then you can't guarantee your payment will be accepted either. Plus, as has been mentioned here already, you're not allowed to pay more than you owe per month.

I'm sure there are good experiences out there, and I appreciate others taking the time to lend their opinions. Hopefully by speaking out about CFS leases, new users on here may be better able to decide whether to take out a lease and if so, how to avoid getting charged.

Cheers,
Slavik

BTW: check out this other thread about property tax charges: http://www.dvxuser.com/V6/archive/index.php/t-340811.html

The property tax fee is a much bigger problem than the late fee. But of course, that's all in the fine print, and anybody who is taking a lease on a $5000 camera surely knows all about property taxes on equipment and how to file with their county or state or borough right?
 
Granted I'm only a few months in on my C200 & C200B leases, I'm definitely not experiencing any problems - I'd say quite the opposite.

I can pay every month using my business credit card (that I pay off in full every month) on their online portal (no need for checks): https://mycfs.cfs.canon.com/online/...f0FuaCgAVfA_xA!!/dl5/d5/L2dBISEvZ0FBIS9nQSEh/

I already carry sufficient equipment insurance, so no additional fees there.

There may have been a small fee or two at the beginning, but overall I'm getting a ZERO PERCENT INTEREST LOAN FOR TWO YEARS and I'm getting to put almost all of it on my Southwest Business Credit Card, so once it's all said and done I'll have received essentially free financing and a free one-way flight on Southwest with all the points I'm getting. Also, there's no penalty for paying off the lease early (I made sure of this before I signed).

I also bought my cameras through Texas Media Systems which has a full sales tax exemption for most Film & TV equipment (not totally sure how that works since I'm out of state, but I don't think I had to pay it).

I know there can be some hoops to jump through & it'd be nice if everything was as easy as a click of a button, but at the end of the day someone is loaning you thousands which is a fairly serious matter to be diligent about down to the fine print.
 
No problems here either , all payments are done automatic from my business account, as soon as i provided prove of insurance the added insurance costs were subtracted with ample instructions to do so or accept their insurance (your choice)
In Holland there are two options for financing( lease and financial lease) normal lease you don't own the camera your renting with a option to buy at the end of the contract for 5% you can own the camera.
second option that made more sense to me. is financial lease here you own the camera and you can add your camera in your books for tax purposes you'll have to pay the sales tax separately.
 
I used Canon Financial when I bought my CN-E primes several years ago, because they had the 0% deal. They can be MF'ers to deal with. I do not like the way they handle billing. You have to set-up "auto-pay"(I recommend either your check-card or CC) or your payment will be late and you do have to have your insurance company send them paperwork to prove that the gear is covered or they will add in insurance(I understand why, it's their equipment until it's paid off and they need to know it's protected/covered in-case something happens to it). I was a few months in, before that charge reared it's ugly head(no one from Canon or your sales rep will tell you up-front about it). As far as property tax, what's the big deal? You're either gonna pay it through them or directly, right? It's being paid and reported, it's not like you're paying it twice. Regarding paying ahead, you can pay it off early with no penalty, if you want. At least that's what I was told when I did it several years ago.
 
ALWAYS.PAY.CASH. Extended credit is evil in all forms. The only thing I didn't pay cash for was my houses. Financing is designed to charge you exorbitant amounts of money no matter what you do. This is one thing our grandparents were much smarter than us on, credit. Most people are clueless about how to utilize credit intelligently and the amount of consumer debt in this country is terrifying.
 
puredrifting said:
Extended credit is evil in all forms.
Click to expand...

Counterpoint: your houses wouldn't have even been built were it not for extended credit. (And if you really avoided using credit entirely, you're going to be paying more for anything that uses your credit history as a factor, which is most mortgages/loans/etc.)

I agree that consumer debt is awful, but... https://vimeo.com/41152287

Understanding and taking advantage of the credit system is one of the smartest things any small business owner can do.
 
The credit "system" here in the US is a joke and should be illegal. It's designed to keep you in constant debt(they don't want you in DEEP crushing debt, but constant "manageable" debt), instead of giving a true indication of your actual ability to repay your debt. Pay off an account early, like a vehicle, and watch your credit score drop like a stone by 20-50 points.
 
slavikb said:
Hi folks, I know various remnants of this warning has been posted before by others, but I just want to reiterate in case anyone's considering getting a 24, 36, or 48 month payment plan for a Canon Cinema camera.

It seems like a great deal with 0 percent interest, but in truth you pay probably close to 10% interest in inevitable fees.

First, they automatically charge you for insurance, as well as your local property taxes. So if you carry your own insurance and pay your own taxes, you have to go to considerable lengths to prove it to Canon and have them issue partial or full refund for those fees.

But the real fees come in the form of consistent late charges you can't avoid. The invoices are generated mid-month, you receive the invoice somewhere around the 20th-23rd of the month, and if you write a check and mail it or pay with your bank's Bill Pay, it takes a few days to arrive and a few days to process and 9 times out of 10 the payment is accepted after the due date. Then on the next invoice you owe a hefty late fee.

Rinse/repeat every month.

I've bought both a C100 and C300mkII with this program and will never again buy into the "deal."
Click to expand...

Property taxes on a camera? Is this a thing some states actually
do? Being from Alaska, I have no state sales tax. Wondering about
the property tax thing though. For places that have this, do you
have to pay it on say a new car?
 
alaskacameradude said:
Property taxes on a camera? Is this a thing some states actually
do? Being from Alaska, I have no state sales tax. Wondering about
the property tax thing though. For places that have this, do you
have to pay it on say a new car?
Click to expand...

Some municipalities have property taxes on equipment/property owned and used by business. For example where I live, if my neighbor Bob bought a lawn mower for his personal use(i.e: to mow his lawn), he's going to pay sales tax on it when he buys it(presuming he buys it locally or in-state) and that's it. But my other neighbor George buys a lawnmower for his lawn maintenance business, he's going to pay sales tax on it when he buys it AND he's going to have to pay annual property tax on it because it's being used for business. We also have annual personal property tax on things like houses, real estate(land), vehicles and watercraft.
 
I agree that the system sucks and the way it promotes debt is super backward, but...

Run&Gun said:
Pay off an account early, like a vehicle, and watch your credit score drop like a stone by 20-50 points.
Click to expand...

If your score drops it has nothing to do with the fact that you paid it off early. Telling someone not to pay off accounts early or their score will drop is potentially harmful advice.

When the score may drop is if you pay off an account, it stops reporting, and you then have what the system deems as "too little" of that type of debt represented. The solution for this, if you REALLY need it (and you don't need any kind of significant debt to have a score over 800 -- we're talking making purchases of a few dollars per month on a credit card or two being entirely sufficient for someone with a clean credit history), is to make sure you replace whatever dropped off with a new debt of the same type. But again this is only necessary if your score is low because of previous issues and/or you need the boost for an upcoming application for a mortgage or something.

And someone who has what the system deems as too much revolving debt / high utility ratios / too many installment loans would probably be better served to pay off early as their score will likely go up after the account reports as paid.
 
Great discussion everybody - we all need to be weary of financial services and loans that seem to be too good to be true. But there are definitely ways to use credit for good, if you're smart.

I forgot to mention, when I took out my most recent CFS lease, for a C300mkII, I was in the process of buying a house. A couple days later I got a call from our mortgage broker and they were in quite a tizzy because the CFS lease took a major hit on my credit score. Just another thing to think about when taking on one of these leases.

alaskacameradude said:
Property taxes on a camera? Is this a thing some states actually
do? Being from Alaska, I have no state sales tax. Wondering about
the property tax thing though. For places that have this, do you
have to pay it on say a new car?
Click to expand...

Gabe, I lived in Anchorage for about 10 years and that's when I had my first CFS lease, for a C100, and they charged me for borough property tax.

The reason to be wary of this is because most property taxes for businesses have a ceiling, where if you own less than a certain amount of assets, you don't owe any property taxes. Anchorage was $20k I think. So if you fit that criteria, and Canon has charged you automatically with their lease, you're in for quite a workload putting together documents to send to both your tax office as well as Canon if you want that money back.
 
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hmm property tax what a silly concept :shocked: at least when it goes further than you owning a house!
It seems to me you better change the heading of this thread to:reasons why to Avoid Canon's 0% Interest Monthly Payments in the USA.
This site is international orientated and your complaints are caused due to US laws and has not much to do with canon or this payment plan.
And to call it a scam??? well maybe your country is scamming you because it seems to keep charging you for something simply because you own it??
 
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