Car financing options & financing sweet-spot

Discussion in 'Cars, cycling and transport' started by Setanta12, Nov 17, 2016.

  1. Setanta12

    Setanta12 Frequent Poster

    I am thinking about a second-hand car purchase and was quoted a reducing-balance-APR% of 10.47 from my local Credit Union.

    This was based on an estimated loan of EUR10,000 repayable monthly over 3 years, with the APR applied on the remaining-balance every month.

    I would aim to make a huge dent in the amount owing in Year 1 i.e. I like the fact I can make payments against the capital.

    But to consider like-against-like, what normal APR should I be looking for? In deciding how much of a deposit to put against the purchase; what factors should I consider.

    The C.U. have said they may request me to become a saver with them - present balance is EUR10. (They were aware of this, when quoting me the above)
  2. twofor1

    twofor1 Frequent Poster

  3. cremeegg

    cremeegg Frequent Poster

    The phrase "reducing-balance-APR%" is meaningless, and it is probably illegal for an organisation to use it in connection the sale of a financial product.

    APR is a legally defined phrase which allows loans to be compared between different terms and different financial institutions. Banks CUs etc must quote the APR when offering a loan, they may also quote any other rate based on pretty much any Mickey ouse basis they like to mislead you about the true cost of their product.

    10.47%APR is expensive, 10.47%"reducing-balance-APR%" is meaningless, and any rate quoted as an APR which ignores the requirement to hold savings with the CU is probably illegal.

    Stay away
  4. Setanta12

    Setanta12 Frequent Poster

    I note some private motor dealers offering PCPs for 4% APR .. .. .. ..