Confused re: car finance

charle1980

Hi everyone

My DH and I have had some bad debts in the past which we have now got under control along with our general finances. However due to defaults our credit history is pants.

A year ago we took out a new car on finance (paying £4500 deposit and £8000 on finance)

After spending lots of time on here and rejuggling our outgoings to enable us to move house I am concerned about how much we are paying on our car loan and hope to get some advice on how I can work out if we can get a better deal with regards to interest.

My credot agreement says APR 26.9 % and annual interest says 13% I have read an article on here about interest rates but am still none the wiser as to what rate I would have to find to be on a better deal.

Can anyone enlighten me?

Thanks
Charlotte

CLAPTON

look at the APR i.e. 26.9%

however if you terminate the agreement early you will need to find out whether there are any penalties....ask them for settlement figure.

Mrs_pbradley936

Your confusion may be due to the amount you pay each month – a lower repayment figure usually means more payments at that figure than if you were to pay a higher amount each month for a shorter time. The APR is the only way to be able to make valid comparisons.

medman

Clapton is right, it's the APR that you need to look at. You should be able to beat 26.9 even with a shakey history. But often the finance that comes with the car has high exit penalties so you need to check this before you do anything.

It may be possible to renegotiate with the lender if you have a period of good payment and ask them for a lower APR, tell them you've found a better rate say 16.9 and can they match it. You might be surprised.

Good luck