Car finance – know your options.

Simon Gray, managing director of Credo Asset Finance

Simon Grey – Director of CREDO finance, talks to drive24 about car financing options.

When we ask dealers “how much finance do you sell to your customers”? They generally reply with a figure of some 20-50% of all cars sold are funded through the garage. That leaves between 50 and 80% of customers seeking finance outside the dealer system. Some lucky people who have saved well may be able to pay outright, but they are in the minority these days. That leaves an awful lot of people looking for trusted finance options.

Some new car dealers, on new cars, have some excellent deals available, low APR’s from 5.9% or less and even some deposit contributions which make their offering more attractive. Anything with this APR or less is indeed a good deal and should be carefully considered as an easy way (all handled in house and tailored around delivery of the vehicle) to finance your new car. But please don’t assume this is the only option for you, do shop around, ask independent brokers for some advice.

Also, always ask for the APR (Annual Percentage Rate), it should be a true measure of the cost of finance with all fees etc taken into account. Many people in the car industry and finance industry use Flat Rates but a flat rate is half the APR roughly, so someone quoting 6% flat will have an attached APR of 12% or more. The APR is the only true reflection of costs and then you can compare “eggs with eggs”

Generally personal loan rates from the internet and banks start around 5-6% APR BUT be wary! Some advertise a “typical” APR but, although they may approve you for a loan, they agree you at a higher rate 9.9% or above is not unusual. Do not be drawn into taking this “approved” option as your only option – there are other lenders out there! Also PLEASE do not assume you own bank will look after you. I recently went to a high street bank for a personal loan to buy out a partner from the business – 25.9% APR was their standard rate!

To sum up – always ask the APR – if you believe your credit rating is good, you should try to keep the APR to single figures – don’t rely on your bank or the dealer to look after you, they may not. If in doubt seek independent advice from someone you can trust.

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Credo Asset Finance is at 85 Yarmouth Road, Norwich, NR7 0HF. Telephone 01603 703180, email or visit the website at

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