What is PAF ?

leechunsonnn

I took out finance on a car back in 2013. The repayment interest (APR) was 14.1% (much higher than I was told it would be when I took it out), but on the yearly overview statement that I received after the first year, it shows PAF: 7%.
I'm just wondering if anybody would know what this PAF stands for, and what it is. I have looked all over the internet to find out simply what the acronym stands for, but there's no information that remotely links to anything to do with finance.
Is it a PPI type charge?
Thanks in advance
Cristiano

Nebulous2

Hello and welcome.

It's a flat rate of interest, with Apr being roughly double that, as you have found.

It stands for Per Annum Flat.

iolanthe07

Is it a PPI type charge?

It is nothing to do with PPI. It is a nasty trick car dealerships have of pretending their interest is much lower than it is by quoting a flat rate. There are lots of posts on here about it. The true APR will have been buried somewhere in your small print, but an approximate rule of thumb is to double the flat rate (PAF) to get a rough APR figure..