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How do I compare finance rates?

Just as you can negotiate over the price of a new car, you can negotiate over how you pay for it

Words by: First published: 6th September 2015
The likelihood is that, if you’re buying a new car, you’ll be buying it using some sort of finance – but it can appear a minefield, with almost as many ways to pay for a car as there are cars to choose from.

As with so much in the car-buying process, the key is to start on your way armed with as much knowledge as possible; and, fortunately, the internet has made this easier than ever. Not only can you research the car maker’s and dealer’s finance packages online, you can also research umpteen other sources of finance that are just a search engine away.

So, if you’re being offered finance by the car dealer, you can challenge them to match or beat the rates available elsewhere. Just as you can negotiate over the cost of the car, so you can haggle over the cost of finance.

When comparing finance, remember to look for the APR (the Annual Percentage Rate which, unlike the Flat Rate, takes into account the fees and interest), and compare the total cost of the loan, not just how much it’ll cost you each month.

For example, one very easy way for a dealer to make a loan seem more affordable is to increase the repayment period, which will reduce the amount you pay each month. However, this will almost certainly increase the total amount you’ll pay over the full period of the loan.
  • TOP TIP – You can negotiate over finance just as you can over the price of the car
Related topics:
New car finance