I have just become the very proud owner of a MY99. When I was looking at the car at the dealers, he said finance would be at 5%apr. I have now bought the car, signed all the agreements, and to my horror have had a good look at the finance agreement, which states an apr of 10%. HELP! How can I sort this out, clearly there is some subtifuge going on here and dirty dealing. Can I go back and demand the 5% as initially stated, or am I stuck with the 10%?
Hope the legal boffins amongst you can help,
chris

 

When the salesman stated a rate of 5% I bet he ment the base rate and left you to assume he ment the APR rate. This is a common salesman tactic to make you think you are getting a good rate. Basically they are gambling on you being so excited about picking your new car up that you will sign the finance agreement no matter what.

Whenever a salesman quoted a finance rate always ask them if thats the base rate as they will immediately realise you know what you are talking about. Oh and they can always give a better rate than their first finance rate quote it's just most people don't realise this and hence don't ask.

Either way I would still rather get a bank loan for the money (Tesco are offering 7.3%APR at the moment)

 

7.3? damm
i only managed about 7.8 a few months back when i bought my classic

 

The rate that you were quoted mate was what the trade call flat rate! Flate rate works out around half the APR rate which is only just by chance! If you were quoted a rate of 5% then that would be in flate rate and as was mentioned above the salesmen do try to jump past that area a little bit! But the APR rate only comes into effect if you do not pay back the loan. You are only charged the base rate interest on the amount you borrow over the period arranged, and charged APR if you do not pay them back. Did you take payement protection when you signed for the finance?

 

APR is the annualised equivalent of the base rate - put another way depending how the interest is calculated it's 5% pa on the sum outstanding at the end of each repayment period, usually each month, expressed as a annual rate. There is a standard formula that must be used by each loan company. You can find lots of loan calculators out in web-land (and I've forgotten the basic APR formula). There are also lots of people round here who talk out of the conventional end of their bodies who deal with this each day as dealers/IFAs.

It is absolutely, definitely not anything to do with whether you repay the loan - take that man outside and have him shot.

Baz

 

thanks guys, so it looks like I fell for the patter then, doh! I did have an inkling that when he said 5% he did mean the base rate, so I don't think I've been too had!
still, it was a better rate overall than what I was paying on my old car, which was 14%.
thanks again,
see you at the big one,
chris.

 

sorry uk sti!i am not a god like you and don't know were you get you're info from but that's what i was told from the finace company direct so please take me outside and pull that trigger! and also the guy on the other end of the phone too!!!

 

Have a look at the finance agreement. If there is no penalty for early repayment, (CHECK ALL THE SMALL PRINT!) then just pay them the money back with the cash from your preferred lender.

My wife did this on a finanace agreement a few years back!

The cheapest money to be had at the moment is by adding it to your mortgage, if you've got one. If you've got a decent one then that will be less than 5% interest (half a % over Bank of England Base Rate).

The downside of that is that you will be paying for it for the next 20 odd years. Still the cheapest money though!!!!!

 

I bought my Sti 8 two weeks ago and got 3.25% flat rate and could take the H.P. loan over up to 5 years.

This form of lending is tied to the cost of funds available in the market and is not associated with the Bank of England Base Rate directly ( by the way the current base rate is 3.75%)

 

I just bought a second hand Citroen Picasso for my missus.
£ years straight finance 3.5% flat

 

Had the same experience when I bought a Mondeo (many years ago)(I have a family all right!). Dealer quoted flat rate but it seemed as though it was APR. Once the agreement arrived with the correct APR (ie, much higher) I got on the phone but was fobbed off. A letter to the MD however and I got a result. They gave me the original percentage rated quoted as an APR, so I was happy.
It's always worth complaining, as the salesmen know exactly what they're doing, taking you in like that, and always put it in writing to the boss man.

Good luck.

 

Were the monthly payments as quoted and accepted by you?

If they were whats the problem, if they are higher than quoted he should be having a problem.

When buying a car on finance forget about interest rates (apr and flat rates) the only thing to look at is the monthly payments,the deal with the lowest payments over the same period of time is the best one (without a balloon)

 

I was looking for rates this morning and came across Cahoot (part of Abbey National I think) with a 7% APR on a personal loan.

Failing that you could always remortgage the house if you're a home owner for an even cheaper rate.

aj