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APR on Car Finance - am I stupid?
%I am appealing to the more financially astute out there to help me.
I am just reviewing my finances and think I have been a tad daft.
I've just brought a car for £25k, placed a £6k deposit and took a 2yr finance deal with the garage at a monthly cost of £250 and an option to pay £18500 at the end of the 2 yrs if I wish to keep the car.
The APR is 13.8 % -is that high???? just seems high, considering I have put £6k in, I will find myself 2 years down the line with still nearly £20k o/s, despite having paid another £6k in repayments.
I am thinking I would be better off just taking a £20k loan out at 8.9% APR over 7 years (yes, I know long time for car loan -but I am commited now ) that will cost me £300 a month, but at least I will feel like I am paying if off now, rather than being faced with nearly £20k o/s in 2 years - and probbaly having to take it over 7 years at that point to be able to aford it ( or, as is on finance - give the car back, which I really dont want to do ! ) Help !!:eek:
I am just reviewing my finances and think I have been a tad daft.
I've just brought a car for £25k, placed a £6k deposit and took a 2yr finance deal with the garage at a monthly cost of £250 and an option to pay £18500 at the end of the 2 yrs if I wish to keep the car.
The APR is 13.8 % -is that high???? just seems high, considering I have put £6k in, I will find myself 2 years down the line with still nearly £20k o/s, despite having paid another £6k in repayments.
I am thinking I would be better off just taking a £20k loan out at 8.9% APR over 7 years (yes, I know long time for car loan -but I am commited now ) that will cost me £300 a month, but at least I will feel like I am paying if off now, rather than being faced with nearly £20k o/s in 2 years - and probbaly having to take it over 7 years at that point to be able to aford it ( or, as is on finance - give the car back, which I really dont want to do ! ) Help !!:eek:
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Comments
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Are you sure it is actually APR you have been quoted? Auto dealerships have a reputation for quoting flat rate and hiding the fact quite effectively. 13.8% flat rate would be about 27% APR, I think. Outrageous, but not beyond the bounds of possibility.I used to think that good grammar is important, but now I know that good wine is importanter.0
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Hi - yes def APR - found an note in small print just now that says a rate of 12.22% has been used0
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It all looks consistent to me
The car cost £25,000 You paid £6,000 You borrowed £19,000
The interest rate was 12.22% and the APR was 13.8%
After 2 years you still have to pay £18,500
Were it not for some additional charges ( and these charges explain why the APR is 13.8% rather than 12.22% ) you should be able to get the car for about £17,112.56 rather than £18,500.
There may have been additional charges both on day one and also when you actually buy the car two years later.
These charges would be shown in the original terms and conditions...0 -
is it pcp with limited milleage?0
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Sure is - 10,000 a year. Then you have to pay extra per mile.0
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