Flat rate 6% or APR for a Car Loan

zorgan

I`m looking to buy a new car around 10k

I`m currently learning about the different finance options available to me, "A well known car dealership" have offered me what`s called a Flat Rate at 6%

is this a good deal or should i look elsewhere?

I just want to understand what other options are available for me, I have never had a loan in my life.

Apples2

Flat rate is about half of the APR so this is actually about 12%.

If you have a good credit rating, you should be able to beat that quite easily.

iolanthe07

If you have a good credit rating, you should be able to beat that quite easily.

Although, sadly, 12% APR is not considered too bad these days.

chanz4

no 12% is about right for hp, avoid pcp though

lawrie28

Flat rate, actually makes it dead easy to work out your interest charges.

If you borrow 10k, you will pay 6% per year on this - so £600, so over a 3 yr deal you will pay £1800 in interest.

Now on top of that you will have setup fees and option to purchase fees, which aren't included in this, however by law they have to be included in the APR %age.

So as lon gas you know this, and ask for what charges/fees there are, you can easily compare deals with dealers, and also make sure you don't get ripped off.

markstevo

chanz4 wrote: »

no 12% is about right for hp, avoid pcp though

Hi just curious, but why avoid PCP? what are the main differences between he available finace deals

chanz4

pcp you pay a balloon payment at the end, and also agree to a stupid low mileage you are really renting

KingElvis

PCP is bad news unless you just want a shiny car to sit on your drive, go over the milage and it's like doing business milage in reverse...you pay in to keep the car in excellent condition and low milage so the dealer can flog it when you return it for your shiny new one.

It's a way of making a poor sap pay the depreciation on a new car but people get had by it every day becuase people like shiny things.

zorgan

hi guys,

thanks for the replies, I think I managed to get a pretty good deal in the end.

The car was advertised at around £9988
Managed to get it for £9688
The road tax of £90.75 which then equals £9778.75
I then paid £300 Deposit which then equals £9478.75


Hire Purchase Agreement was 59 payments @ £201.42
last 60th payment of £499.42

typical APR 11.4%

how does this look to you guys?

Apples2

We wouldn't know, we don't even know what car, model, year etc.

You are paying over £12.5k for this car, if you think it is worth spending that much then there's no problem.

60 Months is a HUGE amount of time to pay for a car though. It is only new for a short while.
Personally I get fed up with cars after 3yrs, after 4 I can't wait to get rid of it, I wouldn't fancy being held with such a long time to go.

Just me though, if you are happy it's all that counts.

LoopyPrune

My boss has got himself in a mess with PCP because his wife wanted a shiny new Golf. 3 1/2 years down the line its costing him £300 a month he cant afford the £3.5k to hand it back and now we have been given our redudancy papers. Avoid this racket.