Car Loans ⇦ Compare Car Loans ⇨ Interest
Rates
Compare car loans
Fortunately, car finance is quite straightforward and if you know how it works it is quite easy to compare car loans…
The average car loan is a fixed term, fixed interest rate loan and with a calculator you can easily double check what you are being offered and compare one loan with another.
It goes without saying that there are 4 factors in any car loan:
1. The Amount – the amount that you borrow
2. The Term – usually expressed as a number of months
3. The Rate – the percentage interest you pay
4. The Repayments – how much a month you repay
These four factors are linked together so if you know any 3 of them, you can work out the missing one. This means that, for example, if the salesperson tells you how much you need to borrow, what the monthly payments are and what the term is – you can work out what rate of interest you are being charged. If the rate is too high you know you are being sold a bad deal!
Alternatively, if they tell you the rate, repayment and term - you can easily work out exactly how much you are actually borrowing. If it turns out to be more than you thought, it means that they have not been truthful about either what you are getting for your car or the price that you are paying for theirs. On the other hand, it could be that they have “misquoted” the finance rate and the loan is actually at a higher rate than they are telling you.
We recently went to a well known national dealership to buy a used car. When the salesperson got to the stage of quoting the finance terms we did the calculation ourselves, based on the figures they quoted, and we found they were trying to do exactly what we describe above… either trying to charge a very high interest rate, or, that we would be borrowing far more than we thought. We didn’t wait to find out which it was… we didn’t buy their car!
You must always double-check, and compare, any finance deal you are being offered!
Before we show you how, we must mention interest rates…
Car Loans ⇦ Compare Car Loans ⇨ Interest
Rates