Car finance and APR/base rate query.

TimeClocker27

Hi

My mother has taken out a finance agreement with Close Motor Finance. She is unstable and tends to live for the moment rather than thinking about tomorrow so I am a little bit concerned at what she has signed up to.

The vehicle is priced at £4750.
Duration is 36 months @ £165.50 which =£5950.80
Set up fees are shown as £304 (no interest has been applied on this)
This equals £6254.80

However what I can’t work out is how the APR is applied.

Her base rate is 8% and the APR is 21% - I intend to clear this for her over the next 6 months so would I just use the base rate to estimate how much the interest payments will be? Or would I need to apply the APR rate also?

I am so confused.

I have calculated the base rate as 3 x 8% = 24%
Price of the vehicle 4975 x 24 = total interest is £ 1,150.80 which I can then divide by the 36 month term to roughly work how much interest would be applied per month?

Is this correct or should I be halving the 21% APR instead to use as the base rate?

I would be eternally grateful if someone could help me with my figures.

Many thanks

[Deleted User]

forget the base rate its the apr that is the cost of the loan over a given period,car dealers often use the lower base rate to make the credit look cheaper