4.5% Car Finance - Can it be beaten? Help Pls

Huggins

Hi All,

Looking to raise approx 9k on finance for a car. My local dealer has offered me his best rate which is 4.5%. Can this beaten and suggestions of where to look/who to contact greatly appreciated.

Many thanks huggins

mrcow

My experience of car dealership loans is that they tend to have quite binding (and expensive) T&Cs. Obviously 4.5% is a great deal for £9k of borrowing but before you sign, you need to check out what tie-ins there are, or you could find yourself tied to a very unattractive proposition.

Are you going to have to take out compulsory insurance? If so, how much is it? What is the loan period? Is it flexible? What are the early repayment penalties? I had a car loan years ago and got caught out over the 'rule of 78' interest repayments - a real stickler. Is there an arrangement fee for the loan? Is the loan rate fixed or can they increase it?

What have they said your monthly premium will be? And over what period? BTW, who is financing the loan?

savvy

I'm not sure what credit card offers are available at the moment, but I bought my car last september with my Barclacard and immediately transferred the £5000 to my Capital One card, that was doing an offer of 3.9% for the life of the transferred balance.

burbs_2

im a dealer and that seems to be quite a good offer, there must be some catch somewhere. as people above have said, check the small print. They may catch you on payment protection, having to take an extended warranty or the like.

I cannot see a dealer giving you that sort of finance for that little apr at the moment.

jonesMUFCforever

Is it 4.5% APR??? or 4.5% flat rate. If it is the latter then it will be expensive and there are better deals out there.If I could borrow at 4.5%apr I would bite his hand off unless there are hidden clauses in t &c.

ey_up

How competitive is the actual car price?

Great finance poor price or great price poor finance i often find. Not saying thats the rule but seamed to be the pattern when i was looking last year.

mrcow

ey_up wrote:

How competitive is the actual car price?

Good point!

Rafter

Be VERY VERY CAREFUL with rates quoted by car dealers - you need to see the APR.

A friend of mine was quoted a rate of 4% but what that meant was she had to pay 4% of the original loan value in interest for each year and it was added to the loan up front.

So say it was a 3 year loan for 9,000 with no final payment, 4.5% (£405 in interest) was added for each year so £1215 in interest in total. That works out at an apr of about 9% which can easily be beaten on a personal loan if you have a good credit record.

R.

boots_babe

We've just done exactly the same; new car £15k, trade in for £6k, so we needed to finance £9k from somewhere.

Took Martin's advice and applied for the Texaco credit card, which has 3.9% life of balance for balance transfers, making it considerably cheaper than the best current loan rate (5.7%) and even the rate the dealer seems to be offering you.

In my eyes even better than a loan as it's fully flexible; we can overpay when we want, and no penalty for paying back early. You can't lose

Link to Martin's article is :
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1094822880,81886,

savvy

Aaaah well done Boots Babe!! I think this really is the best way, IF you can get that amount of credit of course.

boots_babe

There's a thread somewhere in the Credit Card form about the Texaco card, it discusses credit limits. People had mixed experiences, but amongst other things, people found pretty much all the time, that if they didn't get a high enough credit limit, if they wrote to Texaco enclosing recent statements from the card you want to transfer from, and explain that you'd hoped to transfer them but can't without a higher limit, they'll increase the limit to what you need.

Of course, if you are in a hurry you may not have time for that. We didn't have time to lose doing that, so myself and my partner both applied, and between us the credit limit was enough. Not sure whether you have a partner as that might be worth a thought?