In conversation with a long established car dealer recently, he passed on to me his exasperation with the fact that many customers seem to be difficult to engage with about finance and monthly payments.
He mentioned that statistically it is reckoned that 60% of car buyers believe car dealer finance to be more expensive than high street lenders.
Although this is of course anecdotal it is a sure sign that dealers and manufacturers are simply not getting their message across.
With the current lack of fluidity in the money markets and banks unwillingness to lend to each other and rates not representing any true kind of value for money it is always well worth customers investigating dealer rates first and then seeing if their own bank can match or better them.
Currently many buyers have already arranged their finance before going into the showroom and therefore don’t even entertain the fact that there may be big savings to be made.
The fact is that the flexibility with asset backed loans enables lenders to offer very competitive rates but also bespoke finance packages, which during a downturn are vitally important to customer budgets.
The best rates we found for personal loans on the high street were around the 7 to 8% APR range but when checking like for like rates at various franchised dealers we easily found rates much lower. For example, based on borrowing £10,000 over 3 years and naturally subject to status we found deals at 3% flat which equates in real terms to £302 per month meaning that your £10k costs £900 in total interest over the period of the loan arrangement.
Certainly worth considering.