Don’t Buy a Computer From BlueHippo!

Foobarista sent me an email yesterday telling me about a company called BlueHippo, which “sells” computers to people without a credit check. All you have to do is pay a set up fee of $99.00 and then pay their “low” weekly payments for 52 weeks and the computer is yours. Oh, and if you pay for 13 consecutive weeks, they’ll help you out by “financing” the remainder of your balance for you. I have no idea what those financing terms are, but if they are anything like the price of their computers, I’m sure they are horrible!

Here’s an example of what I’m talking about:

Here’s one of the computers that BlueHippo is currently offering:

Blue Hippo Computer

So, you have to pay over $1,200 for this machine and it DOES NOT include a monitor! Not only that, this computer is out of date. A 40 gig hard drive? Come on! Just to give you something to compare this to, I went to the HP website and found this computer:

HP 1510y Series

This price DOES include a 15-inch flat panel monitor as well as a 160 gig hard drive and a few other upgrades.

So, if you could afford to save up $21.99 per week, the MUCH BETTER HP 1510y computer could be yours in 38 weeks and that’s without the $99 up-front fee!

If you have bad credit or are low on funds, the ONLY way you will ever get ahead is to avoid companies like BlueHippo and rent-to-own companies, that disguise themselves as “helpers” but are really wolves in sheep’s clothing. On other words: save up first, then buy!

26 thoughts on “Don’t Buy a Computer From BlueHippo!”

  1. I agree no sensible person would take this deal. However, I wonder what the default rate is when your whole business model is to sell a quickly depreciating asset on credit *without a credit check*. And if you are looking to buy a computer without a credit check, you probably can’t afford it even at regular price and should be looking for a functional used computer for $100-200.

  2. I like how they offer to finance the computer after 13 weeks. Since they don’t “finance” and ship the computer until after the customer has paid more than what the computer actually costs the company isn’t really taking any risk. A customer would have paid $384.87 before they ever got the computer. It would make more sense to save that amount and then buy a cheap computer.

  3. Yeah, I’ve known about this crap for a while. I actually wrote about it in a semi-private online journal back in December 2005. BlueHippo was slamming local radio with ads. “Low weekly payments” blah blah blah. At the time that I wrote, they would get $431 ($35.99 weekly payments times 3 months) for a $400 computer before they even sent it to you! Then continue to charge for 8 more months. What BS. It amazes me that these people are able to stay in business.

    It shows what information asymmetry in the marketplace will do. You and I both know that computer is worth nowhere near what people end up paying for it. If you’re patient, you could buy a comparable Dell for $400. And yet people evidently are willing to pay BlueHippo $1200+ for it, because they’re simply ignorant of the real price.

  4. This is my Reddit post ( reposted here:

    This is totally devil’s advocate. Please resist the urge to downmod me right off the hop – I just want to try to give the ‘other side’ as best as I can present it. I might not get it all right, but I want to try.

    First, let’s turn our attention away from the computer aspect of BlueHippo’s operation. Because regardless of what product they are providing, what it comes down to is that they are providing financing of unsecured loans to people with horrendous credit histories.

    In this case, they are offering a loan to people to buy one of their computers. But we need to forget the word computer and focus in on the magic word of ‘loan’. Because they are essentially loaning money to a class of bad-credit individuals who have a consistent and documented history of failing to live up to their obligations to creditors.

    BlueHippo requires that clients pay $99 plus a minimum of 13 payments of $21.99. This works out to about $385 up-front. Then, BlueHippo finances the rest of the loan and ships the computer to the customer.

    At this point, BlueHippo has around $385, and the client has their $900 computer. BlueHippo is taking a massive risk because credit-challenged individuals tend not to pay their loans back. They know going into it that X % of their customers will never be seen or heard from again and take the non-collectible balance of the loan with them.

    This is why the price of the computer works out to over $1,200 in the end. They need to charge high because a very high number of their customers will simply never pay them. All the good customers end up covering the bad ones. That sucks but that’s the way it goes in the bad-credit-no-credit-no-problem industry.

    Is all of this right or even ok? Should BlueHippo NOT be allowed to offer computers to people who would otherwise never be able to afford them? I’m not sure. But what I am sure of is that they are offering a service that people need. And they are charging such a price to protect their business and still be able to provide a service.

    Could they be a positive force in one of their client’s lives? Perhaps. What if that person used their computer to gain skills that allowed them to double their salary in 5 years and get out of the credit whirlpool? Food for thought…

  5. I have to agree with Shoolz. Yes, the BlueHippo folks are charging a lot for an inexpensive computer, but they are taking a HUGE risk. Perhaps the article should be titled, “Don’t Buy a Computer from BlueHippo Unless you’re credit won’t get-it from someplace else!”

    People that need BlueHippo also need the rent to buy, payday lenders, etc. For some, staying focused on and making monthly payments is next to impossible; thus the weekly payment schedule. Weekly payments keep the lender in the forefront, and help the borrower learn how to budget their money from paycheck to paycheck.

    Unfortunately, folks caught in this type of finacial circumstance will find it very difficult to get out of, but it can be done! I’m not an advocate for BlueHippo, but this type of financing can help some people to eventually get their financial footing.

  6. @ Shoolz: Wait wait wait… a $900 computer? I sincerely doubt that hunk of junk is $900. If it is… you need to do better computer shopping. That computer is more then likely less then $385, or at worst, exactly $385.

    These businesses succeed because of ignorance and stupidity – no reasonable, intelligent person would look at this as a good deal unless they knew they had no other options (and if dropping $385 over three months is having no other options… I return to the ‘ignorant and/or stupid’ remark)

  7. LOL

    Anyone knows once a company says ” no credit check “, it is already a bad deal to begin with.

    No credit check often means you will pay a huge price for the product.

  8. @ Drachen

    “Dell” and “better support” definitely should not appear in the same sentence.

    As for BlueHippo, that’s the beauty of America, you can play on the ignorance of others and make money off it.

    It’s up to America’s population to become informed, careful, and calculated … once this occurs, businesses like this will cease to exist. Until that day, BlueHippo should be allowed to exist.

  9. What risk is BlueHippo taking? I’m not denying their right to make money by imposing a tax on ignorance, but since the prepayment covers the cost of the machine, there’s zero real risk to BlueHippo’s bottom line. You could default the day after the machine shows up and BlueHippo hasn’t lost a dime (other than costs involved with trying to collect), since they don’t ship until you’ve covered their cost-of-goods-sold.

    This is a very nice business model if you can actually make it work.

  10. I have a 622 credit score and cannot seem to get financing for a computer. I had a bankruptcy in my past a little over 5 years ago and HAS been discharged. I have made all credit payments and loan payments over the past few years but still no luck with getting a computer. Does anyone know of any major companies (Dell, Apple, Compaq, HP, Gateway, etc) who is more lenient with there financing than others?

  11. For the price Blue Hippo is charging, credit aside. One can get the parts to build a perfectly functional PC of equivalent power and quality of Dell, HP/Compaq, IBM, Gateway etc. or better or get someone to do it for them for $1200+, with a monitor if you know where to look. Also, places like Best Buy, Circuit City and the smaller computer shops have PCs of equal or better value for far less than $1200+ and can even get a decent LCD or CRT monitor with it and still not reach $1200+. There is Ebay as well, a lot of companies auction off PCs, laptops etc and many still have warranties attached and still isn’t $1200. Credit histories aside, one can get a computer cheaper and better than Blue Hippo if one knows where to look.

  12. Scott,

    Don’t bother trying to finance a computer. Just keep going with what you’ve got until you’ve save a thousand bucks or so. You will be much better off in the long run. Sorry to hear about your past misfortune, but I doubt you NEED a computer so badly you can’t wait a little while. Here’s a tip: ask friends and family to pitch in around the holidays to help you get the comp of your dreams…

  13. STOP THIS IGNORANCE. It is a deal for dumb people. No rationalization needed since they are dumb. You can get a complete system (LCD/180gig/DVD read/rite) at Walmart for $399.00.

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  15. I bought a computer from Blue Hippo and I am still trying to get everything from them. I ordered my computer with Windows XP,maximum memory,and a larger hard drive than the 80GB offered. It came with Windows Vista,which I did not want, now over half the programs I use daily will not work on the computer,125GB hard drive,and NO MEMORY to speak of. There are no back up CD’s incase the computer needs to be reset,the ONLY CD with the computer was the reinstall Windows Vista disk. Blue Hippo has said that if I want the disks to contact the computer company and ask for them. Dell says that Blue Hippo ordered the computer and they must request the disks be sent to me,and they will send them ASAP. Blue Hippo says it’s not there problem and if I can not get them,OH well it’s my problem and they said stright out-DON’T call them again about the disks I am missing. I have stopped the withdrawals from my account and have been threatened with jail time. This is one hell of a lousy company to do business with.

  16. blue hippo or blue hobo, hasnt sent the free gifts that where suppost to come 8 months ago my computer has been payed off and full 4 8 months, they said they put me in a new sistom and i said theyre new systom SUCKS!

  17. that computer is worth less then $100 i build quadcore machines for $400 phenom agena 2.3 ghz 320 gig wd hdd 4 gigs of g.skill gaming ram 480 watt power supply theese guys are loan sharks that’s what they are and add $160 for a 19″ widescreen lcd samsung

  18. Yeah, Blue hippo sucks. I was mislead and attempted to purchase a computer from them. My boyfriend told me it was not a good deal. Unfortunately, I had already given them $99.00 of my hard earned cash. I canceled my order. No refunds could be given so I had to choose something from their on-line catalog. I chose a Sandisk mp3 player for $57.00. The amount due would come from my initial $99.00 payment. I could not use the remaining balance toward the shipping and handling fee and they had no other merchandise available at the rate of my remaining balance. I then had to send another $21.00 for the shipping and handling fee. It has been over three months and I have yet to receive my mp3 player. Everytime I call all they can say is “Please allow more time”. Over three months for a mp3 player. This is unsatisfactory. If you ask to speak with management or anyone other than a customer service rep, they supposedly, don’t take phone calls. There is no one you can complain to.

  19. hi my name is candy and i paid over half the money to blue hippo that they said that i was supposed to pay and they said that they would send me my computer and now its been 3 yrs and i still havent seen the computer yet and they refuse to give me my money back, its a rip off and i will be sueing blue hippo for this.

  20. hi my name is sunshine and i paid over $900.00 to blue hippo I havent seen my computer yet it has been 3 years.They refuse my phone calls and fefuse to give me my money back.The first payment was like $99.00.They said to get something out of the catalog,havent heard nothing yet,had only $300. left to go.

  21. @shoolz. A $900 computer? Dell offers a 4GB Ram nd 500 GB Hard drive, HD screen, 8x cd/dvd/br burner w antivirus software and windows 7 premium laptop plus a 3-1 wi-fi wireless printer for about $1,050. No one can really fall for this scam. A 40 GB hard drive? Never even heard of a power w such a small hard drive, what a scam.

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