Confused about how much the APR is

Galaxy863

I was hoping someone could help.

Me and my OH went to get a new car yesterday ( well its 9 months old so not brand new ). The guy went through all the figures and said the monthly repayments would be just under £210 a month ( he did say the exact amount but I can't remember off the top of my head. ) I asked him what the APR was on this and he said 7% so I thought great, thats quite reasonable.

However when I've come home I thought I'd have a quick look to see how much it would cost if I were to take a loan out for the same amount. A loan at 7.9% would cost just under £185 a month. It was a comparison site so I scrolled down and found the APR to be paying £210 a month is around 13%!!

Can he legally tell us the APR is that amount when it quite clearly isn't? We haven't signed anything yet as we are supposed to be doing all the paperwork when we pick the car up.

CLAPTON

they just love to quote the 'flat' rate which is roughly half the APR... well done for reading the paper work.

look to see what rates you can get from 'normal' loans.

tictax

work out the total amount repayable. that is much more useful that aprs

Galaxy863

Oh right I see...

so it would work out cheaper for me to get a loan out elsewhere then really, but am I able to do that as I always thought the price on the car was on the condition you took finance out for it, or is that not the case?

I suppose the other option is paying off the finance straight away with a loan so the repayments will be less, I'll just have to see if/what the penalties for that would be

It's all getting complicated now :eek:

CLAPTON

.... we are entering a recession.
.....lowest car sales for years...
.......if they don't offer a good deal go elsewhere

hope you got a good discount of the price

HeadInSand_2

Galaxy863 wrote: »

Oh right I see...

so it would work out cheaper for me to get a loan out elsewhere then really, but am I able to do that as I always thought the price on the car was on the condition you took finance out for it, or is that not the case?

I suppose the other option is paying off the finance straight away with a loan so the repayments will be less, I'll just have to see if/what the penalties for that would be

It's all getting complicated now :eek:

If you are a cash buyer (e.g. a loan from elsewhere in this instance) you can dictate what you want to pay for the car (obviously relative to its real world value), as mentioned above, car sales are through the floor and you can strike some sparkling deals.

nobblyned

Galaxy863 wrote: »

I was hoping someone could help.

Me and my OH went to get a new car yesterday ( well its 9 months old so not brand new ). The guy went through all the figures and said the monthly repayments would be just under £210 a month ( he did say the exact amount but I can't remember off the top of my head. ) I asked him what the APR was on this and he said 7% so I thought great, thats quite reasonable.

However when I've come home I thought I'd have a quick look to see how much it would cost if I were to take a loan out for the same amount. A loan at 7.9% would cost just under £185 a month. It was a comparison site so I scrolled down and found the APR to be paying £210 a month is around 13%!!

Can he legally tell us the APR is that amount when it quite clearly isn't? We haven't signed anything yet as we are supposed to be doing all the paperwork when we pick the car up.

The loans were over the same period and everything? Is it possible the salesman is including some form of PPI?

tictax

in fact - the way that car sales are going these days you will be able to negotiate a better deal for the finance.
how old is the car and over how long is the finance?
dealer finance can be as competitive as going to a bank etc bt you need to do your homework