Representative APR

Tiddlywinks

Five years is a long time to be paying for a car.

9.9% APR as well.

You need to be sure that you really love that car and that it will suit your needs for the foreseeable.... have you considered if it will still be doable if you encounter employment hiccups, family growth, mortgage moves etc. Also are you sure the vehicle performance (depreciation, economy, emissions etc) suit a five year commitment?

tidds

I've generally always gone for 4/5 year commitments on cars and i've never actually had them for longer than 2, I think the maximum was 1.5 years. I prefer to have lower monthly liabilities with the ability to overpay which I do.

In regards to employment hiccups, I have three sources all that could independently cover my full monthly liabilities without the other two so no concerns. Family growth, hence the 4x4 right ;-) we've just moved to a bigger house, hence me not going crazy with the purchase cost, affordability wise I could spend a lot more.

9.9% APR IS a lot, and thus I am going to get a personal loan instead likely. I promise I won't come on here and moan when I don't get the headline rate ha

tidds

P.S i've had 7 cars in my lifetime on HP, PCP etc so it's not a decision i've taken without considering and I fully understand the implications. Embarrassingly, i've never properly shopped around on rates before and have looked at the monthly amount, the loan amount, acknowledged I can afford it and not gone into details like this before.

PeacefulWaters

They should ban the use of flat rates and jail any salesman who quotes one.

andyfromotley

PeacefulWaters wrote: »

They should ban the use of flat rates and jail and salesman who quotes one.

Here here.

Look how it confused this reasonably savvy experienced car buyer like our OP. Its a con, it is deliberately used as a con to mislead and confuse people. yuk Yuk YUK!!

glennstar

Tidds,
In your original post you say 9.9% APR representative but in the list just show 9.9% APR. If they say 9.9% APR (annual percentage rate) then this is correct (not done the calc but looks broadly right). If they have stated that this is the rep APR then they have made a mistake (although again, the value looks broadly right). They are required by EU (I think) law to show the APR.
As others have pointed out the APR is a calculation that allows you to compare the cost of finance based on the loan amount, duration and interest rate. The interest value is the amount of interest you are being charged.
They are in effect the same thing although confuse because the values can differ massively due to the fact that the time element can push the APR into 000s% when the time scales are reduced (as per Payday loans).
It's also worth noting that the APR does not include charges that do not form part of the repayment amount settled as part of the monthly/final repayment.

tidds

glennstar wrote: »

Tidds,
In your original post you say 9.9% APR representative but in the list just show 9.9% APR. If they say 9.9% APR (annual percentage rate) then this is correct (not done the calc but looks broadly right). If they have stated that this is the rep APR then they have made a mistake (although again, the value looks broadly right). They are required by EU (I think) law to show the APR.
As others have pointed out the APR is a calculation that allows you to compare the cost of finance based on the loan amount, duration and interest rate. The interest value is the amount of interest you are being charged.
They are in effect the same thing although confuse because the values can differ massively due to the fact that the time element can push the APR into 000s% when the time scales are reduced (as per Payday loans).
It's also worth noting that the APR does not include charges that do not form part of the repayment amount settled as part of the monthly/final repayment.

Thank you glennstar. Have just checked and it absolutely says 'representative' - also, i've had it confirmed with them that there are no other charges. No final repayment either as this is HP.

On this 9.9% APR basis I know that with my credit history I SHOULD be able to beat this with a personal loan, my own bank have offered me a 3.4% so even if I don't get headline i'd hope for it to be under 9.9%

Any advantages to going through the garage that I haven't thought of? The only advantage currently is a small discount, but the APR difference would negate that anyway.

Thanks again for all your help folks.

~Brock~

PeacefulWaters wrote: »

They should ban the use of flat rates and jail any salesman who quotes one.

You do know that it is a legal requirement to show both rates on the agreement?

Nearlyold

~Brock~ wrote: »

You do know that it is a legal requirement to show both rates on the agreement?

Not quite correct, it is a requirement to show both the APR and the interest rate however there is no requirement for the interest rate to be expressed as a "Flat Rate"

tidds

Either way, it needs to be simplified!