Is there any way in which this adds up?

Yeah, its normally worked out by the poor sap on month 6 or 12 or when they try to get out of the agreement.

Good job.

Nearlyold wrote: »

You have to show the APR but you can also use Flat Rate in a credit agreement as long as it can't be confused with the APR. Car dealers like to quote flat rates for two reasons, the main one being it sounds cheaper and secondly, its much easier to work out what the payments will be (you can do it on the back of a fag packet anywhere).

The last 3 cars we have bought (all from "reputable" main dealers) the dealers have always insisted that they show us a credit example, even when we have made it clear we are cash buyers.

Based on the above, I wonder if one reason for this is that it allows them to quote the flat rate just as "interest" in order to try and draw people in?

As flat rate is one of my pet hates, I always wait to see if they make this clear, they never do!

As a test I now repeat clearly to the missus when I know they are listening: "Oh, so (flat rate)% is the APR" and not once have they corrected me. They just let the comment pass as if they didn't hear it. :think:

If I then direct the question directly to them, they will correct me as they are probably legally obliged to do so!

Strange, because if you can't trust a car salesman who can you trust?