Car financing options & financing sweet-spot

[Setanta12]

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)

 

[twofor1]

10.47% seems high.

My local Credit Union has car loans at 6.5% APR and you can make extra payments to clear the loan early.

BOI has variable rate car loans at 7.5% APR and you can make extra payments to clear the loan early.

https://personalbanking.bankofireland.com/borrow/loans/car-loan/features-benefits/

I’d guess there are many others who offer variable rates considerably better than 10.47%.

 

[cremeegg]

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

 

[Setanta12]

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