Peter L

I am just going through the process of putting a deposit down on a STi 7 for when the PCP on my MY99 ends later this year.

I want to continue the same type of finance, but wanted to check what APR I should expect. So far two different dealers have quoted 12.9% and 9.9% respectively. I got my current deal at 9.9% which was 2.5 year ago - since then interest rates have dropped!

Any better deals going out there?

Cheers
Peter

Scott WT

Peter

You should be able to get high 8's on an unsecured loan at the moment, or even better still if you can, re-mortgage your house with one of these new 'flexible' mortgages to use the equity and get interest rates of around 5% on the money you use to finance your car.

I know neither of these are PCP schemes, but might be worth considereing if you haven't already.

Cheers

Scott

Baby Blue

I got 8% APR from my dealer a couple of months ago. They originaly quoted 9.5%APR.

Dealers make almost as much from selling you their finance as they do from the car itself, sometimes more!...so haggle!!

They would rather sell you the car at a lower APR than loose the sale altogether.

iain atkins

Yeah 8% sounds about right, i got 9% in september 2000.

You may even be able to get them to 7.5%

Fitz

I got the dealer to match a flat rate of 4% after originally quoting a rate of 12.9% APR. 4% flat is very roughly 8% APR.
Point here is that don't take their 1st offer as they will haggle.
As pointed out they make as much if not more money from Finance so
additionally if you take their finance (at new lower rate) you
are in better position to reduce the price or get extras thrown in.
I actually got my loan on the Abbey Nat's flexy mortgage. Great
rate of 4.5% APR !!!

TBMeech

Dealers make far more money on the finance then on the car, I can tell you that, you should be able to negotiate a decent flat rate easily, having worked for a finance company for about 7 years I can tell you some commissions i have seen

sillysi

I got 4.8% APR on a PCP in December last year. When the paper work came through IM had dropped it to 4.7%.

RoShamBo

iTrader: (1)

Flat rate is the key - not APR. People get hung up on APR too much.
I just got 4.5 flat from a Vauxhall dealer no problem - might have got lower but happy with that.
A simple calculation to work out monthly repayment on a straight repayment loan is :

3(being the number of years borrowing over) x 5 (being the flat rate) divided by 100 +1 = 1.15
1.15 x 10,000 (or whatever the amount borrowed) = 11,500 then divide by 36 (the length of borrowing in months)
= £319

Ro.

Reffro

Yep I concur with all the above, having been a car salesman in the past. Finance commission is easily worth more than the profit on a new car, if you can get the punter on a high enough rate. If you want the ins and outs of car finance, drop me a line with your telephone number and I'll give you the full sp.

JohnS

iTrader: (1)

It should be relatively easy to get 4 to 4.5% flat rate from your Subaru dealer at the moment. Most will start with a higher rate, but will drop down lower if pushed.

John

Baby Blue

sillysi's 4.7%APR in December will have been on WRX with sports seats, offered directly by IM. The dealers won't go this low on their own accord.

Flat rate is usually 1/2 the APR or there abouts 4& flat is about 8%APR. The dealers will quote you a figure, make sure you know which one it is. Personally APR makes more sense to me than flat rate but each to their own!

Good luck m8.

sillysi

Baby Blue,

You are correct, the dealer bought ten cars from IM when they had this special promo on. I was just about to buy a classic shape when I came across the advert in a local paper, IMO it was to good to miss.

Si.

[Edited by sillysi - 5/13/2002 3:51:42 PM]

Rich B

Anybody know how the front loading for the interest is calculated? I always end up paying loads of interest then swap the car just as I start paying off the capital - bloody con that is!

Thanks

Rich

Vate

You are front loaded with interest as you have a larger outstanding balance owing in the beginning (obviously).
If APR is 8%, the term 3yrs and payment monthly then...

((1+8%)^3)/(((1+8%)^3)-1)* amount borrowed * 8% / 12 is mthly pmt.

Don't be a fool and borrow money against your house (recently appreciated asset) to buy a car (fast depriciating asset). You can borrow money from BS at c.8% APR if you are a good credit so you should expect at least as good level from Subaru Finance as they have the car as security (remember your name is on the V5 but you do not own the car until you make the final payment). Would you really risk your house to buy a car??? Mortgage rates might go up you know....

ScoobyDoo555

reffro - gimme your email addy please

Cheers

Dan

Silver Knight

Forget interest rates, whoever gives the lowest repayment over the same period of time is the cheapest loan, apr's and flat rates are just a guide.
The Amount that you pay out is the only true way of measuring how much your loan will cost i.e 35 x £250 or 35 x 251 =£35 less in the first equation
Tell them your budjet is lower than you want and let them struggle to match your payments without extending the period.

Molds

Also...

If you borrow on the mortgage, it may seem low % but over 25yrs adds up!

If you have a mortgage then the bank will already like you - get a personal loan instead.

Check your ASU (Accident sickness unemplyment) policy you would have taken out when you got your mrtgage. Mine covers me for nearly £1000 mnth for life (tax free) if I need it - pay £18 mnth to Standard Life for that. The point? You don't need the insurance protection on the personal loan - brings the total to pay back way down!

Matt

Reffro

Scooby YHM.

Reffro

Stupid me. I tell people to drop me a line and I haven't included my e-mail address in my profile. For those that are bothered

refropatton@hotmail.com

Fitz

Molds,

That's not true on the mortgage.

You can choose to pay it off from anything from 1 month to the exisiting term of the mortgage. Your choice....

It's by far the cheapest option, unless the dealer is doing a special deal with additional financial help from IM. With the flexy mortgage there is no initial fee and no closing off fee.

Chris

MattN

APR's are important.

A flat rate is all well and good but an APR gives a better picture of the cost. A flat rate doesn't take in to consideration the fact after month one you owe less money.

You owe more money at the beginning of the term, simply take your APR and divide by 12 to give the monthly cost of interest, the balance is what capital your paying off.

Also remember the calculation for APR is complicated and a lender is allowed a variance. Total cost is imprtant too.

Molds

>>>You can choose to pay it off from anything from 1 month to the exisiting term of the mortgage. Your choice....
<<<

I stand corrected Fitz. Hadn't appreciated you could do that.

And.. Guess if you borrow against the mortgage it is best to say it is for home improvements ;-)

Peter L

Thanks for all your comments - yet again the power of Scoobynet shines through

It is good to know what the real story is and how far I can push it in getting a deal.

Cheers
Peter