How can I compare finance rates?

The likelihood is that, if you’re buying a car, you’ll be 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.

Words by: First published: 13th July 2015
As with so much in the car-buying process, the key is to arm yourself with as much knowledge as possible. Fortunately, the internet has made this easier than ever, allowing you to research various finance packages online.

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

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

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