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How do I compare the APR and the Flat Rate?

When you're comparing finance offers, make sure you compare like with like

Words by: First published: 13th April 2015
You should shop around for finance just as much as you should shop around for a new car. But, when you’re comparing loans, you should make sure you’re actually comparing like with like.
What you want to find out is the APR (Annual Percentage Rate), but some lenders may quote you the Flat Rate – which will be less than the APR.

That’s because the flat rate relates only to the amount of money loaned, but the APR also takes into account all the various extra costs and fees – such as insurance, administration charges and so on – that are involved in the loan on top of the interest.

These add to the overall cost of the loan, effectively increasing the loan rate, because the amount the charges add is equivalent to a few extra percentage points of interest.
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New car finance