20% interest for car finance too high?

devlopands

I have 2 defaults on my credit file from last year - 1 is settled and the other is not.

The unsettled is a vanquis credit card for £3,500.

These are the only issues on my file - everything else is ok.

I applied for car finance and have been accepted by a sub prime lender at a rate of 20% over 4 years.

Is this too high? It seems very high, but I can understand why this would be due to these defaults.

I am considering accepting it and using to improve my credit rating. is this a recommended?

After 2 years of paying keeping up the payments on this, would my credit file have improved and would there be anything i could do to refinance the car or trade in and get a better rate etc?

19lottie82

Is it too high for who, for what, for when?

Thats a pretty broad question!

I wouldn't take it, that's for sure BUT given you have a 2 defaults on your credit record, it could be the best you'll get.

It its "too expensive", is a personal choice for you.

opinions4u

What's the APR?

gazman100

I'd also advise to be very careful to check whether it's flat rate interest or APR. Car dealers use flat rate loans a lot. If you're not sure the difference read the flat rate loan bit here:

http://http://www.moneysavingexpert.com/banking/interest-rates

iolanthe07

I agree with gazman. You could find yourself paying around 40% APR if the 20% is a flat rate quote (car dealers' common trick). Even 20% APR is very high, imho, but it is the price of having a poor credit record with an unsatisfied default.

Apples2

Far too high, if you can't keep on top of a Vanquis card, how on earth will you keep on top of car repayments?

With that rate you will end up with a clapped out banger, some old trade in on its last legs. The car will be broken within a few months leaving you owing thousands desperately looking for a way out.

Nice_Weather_For_Ducks

5% is too high, but then again even though im on minimum wage I refuse to borrow for anything!!

Asiacat

Do you have a specific car in mind?

How much s the car?

Will you be able to keep it running for the duration of the loan?

How badly do you need the car?

Would a motorcycle suffice until you can get your finances in better shape?

chanz4

I smell a green visitor, under a bridge