How To Get An Annual Discount With Dish Network

Feb 06 2008

Posted by NCN as Frugality |

I recently upgraded my Dish Network satellite receiver. While he was installing the new receiver, the technician suggested that I look into the ‘annual discount’. Yesterday, I called Dish Network. Here’s the deal -

If you prepay for 11 months, you’ll receive 1 month of service for free.

This discount applies to your ‘programming package’ and does not apply to leasing fees, dvr fees, etc.

So, even if you prepay for a year, you’ll still get a monthly bill for miscellaneous fees.

The actual discount will vary, according the ‘programming package’ that you have.

In my case, my ‘programming package’ is $44.95 per month.

If I prepay, my annual cost will be $494.45, instead of $539.40.

This equals a discount of 8.33%.

I signed an 18-month contract, so I’ll be paying these fees, either way.

If I prepay, the entire $494.45 will be ‘gone’ and I will have received the discount.

If I do not prepay, I can keep the money in my savings account, earn about 4%, and I will not receive the discount.

So, what would you do? Is this a good deal, or not?

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5 Responses

Randy Hunt

February 6th, 2008 at 10:33 am
1

The comparison is only fair if you would be making the monthly payments out of that same savings account. Assuming that was the case, your options would be (n-540)+(.04n*12) versus (n-500)+(.04(n-500)*12)… or to simplify it even further, you’re basically trying to figure out if the interest on $540 over one year would equate to $40. I think the answer is going to be no, and I would say you’re better served by paying the lump sum and saving the $40.

However, that was assuming that you’re paying your bills out of the savings account. Odds are that you’re not. Therefore, my feeling is this:

You’re probably not earning anything on the money in the checking account from which you pay your bills. So now you’re talking about the difference between making a monthly payment from your bill paying account, versus pulling interest-earning money out of savings. You’re unlikely (most people are) to replace that earning power diligently, so in this case, I’m against doing it, because it’s never a good fiscal choice to reduce your assets for the purpose of increasing a liability.

To be honest, I think the amount of money being worried over is far too small to be worth the effort, but it’s a nice exercise in financial planning.
Odnal

February 6th, 2008 at 12:02 pm
2

By paying monthly, you would earn about $10 over the course of the year (remember to reduce your amount in savings by $44.95 each month). So by prepaying, you are saving about $35.00. As long as you have the money handy, it makes sense to me.
tlange

February 6th, 2008 at 6:53 pm
3

This is a good deal, take it!
Christopher Smith

February 8th, 2008 at 5:26 am
4

Also, keep in mind that unless you manage to somehow deduct your TV, the money you save by prepaying is after-tax money. If you put that money in a savings account, you have to turn around and take a 25-33% hit on the interest you got.
Kiran

February 8th, 2008 at 2:20 pm
5

You are getting an after tax return of over 8% . A fixed return. Your pre tax return is going to be less than 4% in most on-line savings (ING, etc.) over the course of that time. If its no hardship today, do it.

Employing your capital to get 4% (savings account) is worse than 8%, all you sacrifice is the liquidity.

Its really just a great Certificate of Deposit, that happens to throw off Dish Network as interest.