A&L car purchase plan

murphwiz

Is there a catch in the A&L Car purchase plan loan?
Seems a good offer at a sensible rate?

A low monthly payment is my main concern, but it's it's a few quid either way for a better overall deal then I'll look.

Anyone used the A&L plan?

Martinslovechild

Their website says

If you were to borrow £7,500 with a deferred amount of £3000 (40%) over 36 months, you would make 35 monthly Direct Debit payments of £150.92, then sell the vehicle to make one final payment of £3,150.92, giving a total amount payable of £8,433.12 (5.9% APR Typical). Or, if you decide not to sell or trade-in the vehicle at the end of the period, you can simply continue to make the same monthly payment until the loan is paid off, that is a further 20 repayments of £150.92 plus a final payment of £142.85, giving a total amount payable of £8,594.37 (5.9% APR Typical). In both cases, the interest is guaranteed to remain the same until the loan is repaid.

The above loan is for 55 months. A similar loan with Cahoot @ 6.7% for 48 months costs £177.87 per month and a total amount of £8537.76 (or £229.88 per month over 36 months, total = £8275.68).

The reason that the A&L deal looks so good is because you are deferring 40% until the end and only paying off 60% over the first 3 years. Personally, I would want the car to be mine after 3 years rather than having to repay a further 20 payments, but if lack of cash is a problem then A&L may be a good choice.

It's also worth checking what early redemption penalties there are with the A&L loan - there are none with Cahoot's flexi loan, for instance.

murphwiz

Thanks for that, not thought of it that way, and you are quite right!

My main reason for thinking the A&L way, is that I do get bored of cars easily, and seems a good idea to have one for 3 years, defer amount, and as long as the car is worth a reasonable amount more than the defered amount after 3 years, I should be quids in (so to speak?)

Any further thoughts/pitfalls?