How does car finance work?

thiinking of buying a car for 4k been told the interest rate will be 5%. but reading the document there is another percentage rate of 10.1% hows this work

How does car finance work?

the worse your credit score is the higher your intrest rate will be

they tell you that the intrest will be 5%, and it can be, if you have perfect credit, but the lower your credit score, the higher the % goes

if your wanting to buy a car for 4,000, be careful, because most cars that are that price arent very good, i suggest buyting something a little more expensive... at least 6 or 7k that way you know your car will be reliable and not break down, if you buy one for 4k and breaks down, you could end up paying alot more just to get it fixed

How does car finance work?

one is prob an AER and the other is maybe an APR

How does car finance work?

you buy a car and pay well over the odds for it for a year or two, do what i did save x

How does car finance work?

Are they referring to the Truth in Lending percentage rate to get that 10.1%?

They are adding up all the fees and loan origination costs in addition to the interest fee to tell you exactly what your cost of financing is going to cost you. If you were to pay cash, you wouldn%26#039;t be subject to these fees.

Another alternative is to go to your bank or better yet, credit union. They don%26#039;t sock you with extra fees just to borrow the money (besides the interest rate). You will save thousands over what the car company%26#039;s finance department loan.

How does car finance work?

Don%26#039;t just go by these interest rates you are better asking how much the monthly payments are Better still go to moneysupermarket.com and see their comparisons and you will see if your getting the best deal it costs nothing to check

How does car finance work?

Is it a percentage of interest? Does the document describe what kind of rate it is, and what it is for? It could be the maximum variable rate for delinquency. There is not enough information in your question yet to be able to answer it accurately.

How does car finance work?

first you go to the garage then they pull your eyes out then when you cant afford to pay they take the car back and you get black listed for 5 years

How does car finance work?

To put it very simply...... The 5% quoted is the FLAT rate of interest and the 10.1% is the APR. The flat rate of 5% means that for every 鎷?00 you borrow you pay back 鎷? in interest PER ANNUM. So in your case...borrowing 4k you will pay back 鎷?00 in interest for every year that you%26#039;re borrowing the money...so if it was a 5 year term you%26#039;ll be paying back an extra 鎷?000 + any document or set up fees...usually upto about 鎷?50.

APR%26#039;s were basically invented to standardise the money market and fluctuate according to how much you are borrowing and over what period you%26#039;re borrowing.

Make sure that the salesperson identifies that it is 5% flat...because if it turns out to be 10% don%26#039;t touch it!!!