September 17, 2016
When comparing car loans it is best to compare the monthly repayment rate over the term and not the interest rate.
Other car finance lenders and car yards/dealerships, may advertise cheap interest rates however, included in their monthly repayments may be a lot of extra fees and charges such as admin and processing fees.
Its best to find out how much the repayments are and over how many months.
Option A: a 9% interest rate for a car that is worth $7,000.00, you would compare the monthly repayment i.e. $160 a month over 60 months’.
Option B: a 5% interest rate for a car that is worth $7,000.00, you would compare the monthly repayment i.e. $170 a month over 60 months’
Therefore, even though the interest rate is higher for option A, you would end up paying less for the car as $160 x 60 months = $9,600.00 compared to $170 x 60 months = $10,200.00
For more information Contact us today for a competitive car loan/finance quote.