How to get a better APR

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Sun 12 May 2019 21:01
How to get a better APR - Prjpro

Hi

I am looking into buying a used Kia Venga. £6-7k. I am not originally from the UK, so all the finance steps are new and different from my country, Spain.

I have just confirmed and APR of 14.8% with Zuto for borrowing between £3000-7000 (I haven't decided yet about deposit amount) to be paid in 4 years.

I have checked with my bank (which doesn't leave a mark on my credit rate) and it is just slightly better )14.3%.

All of them seems to be very high to me. I have lived and worked in the UK for above 5 years. Zuto said I have a very good credit rate but a very short credit history, hence my APR.

I don't want to start requesting finance from others company, as it left a mark on my credit rate, making it worse.

Questions:

is it a normal APR?

Is it worth to try a different finance company? Any suggestions?

Am I missing any evident step to get a better APR?

Any advice or comments are welcome

Regards

Edited by Prjpro on 12/05/2019 at 21:05

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Mon 13 May 2019 01:06
How to get a better APR - SLO76
High street banks offer loans of £7,500 or more at 3% APR which should be accessible as long as your credit score is ok and has nothing particularly detrimental on it. I’d seek out another lender as you’ll be adding a fortune to the cost of the car at such a high rate of interest. Otherwise it might even be worthwhile taking dealer finance which is entirely negotiable and should be possible to hammer down to less than 8%APR with a bit of effort. I certainly wouldn’t be paying the rates you’ve been quoted, I’d live with a cheaper runabout until my credit score improved.
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Mon 13 May 2019 07:11
How to get a better APR - Wee Willie Winkie

If two lenders have both offered you roughly the same APR in the 14% ballpark, then there is no way on God's earth another high street bank (with whom you do not have an existing relationship) will offer you significantly less.

As mentioned above, it may be worth trying dealer finance.

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Mon 13 May 2019 08:49
How to get a better APR - oldroverboy.

Try you own bank first, they will do a soft search for you, but best go in and see them.

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Mon 13 May 2019 12:06
How to get a better APR - Engineer Andy

It could be that the OP hasn't got an established UK credit rating (is 5 years enough? It may be that it isn't long enought of they've no mortgage or other large loan that can be used to show they can pay money loaned back OK) because they've come from abroad, and thus are being charged a high rate because of this, rather like a driver with insurance previously on a long-term company policy and transferring to their own.

I'm not sure if credit ratings can be transferred from one country to another.

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Mon 13 May 2019 15:34
How to get a better APR - gordonbennet

A money article in the Spectator shows several banks offering 2.9% APR on £7.5k over 5 years, with John Lewis Financial Services unique in having no early repayment penalties.

I'm as far from a financial wiz as its possible to get, and don't do loans myself so please check the details for yourself.

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Mon 13 May 2019 17:27
How to get a better APR - concrete

The moneysavirngexpert.com website has a section about loans. They will do a calculation on the website which will not leave a marker on your credit file and tell you the chances of acceptance for a loan. Interest rates vary between 2.9 and 4.5%. Sometimes it is cheaper to borrow more than you need. It seems the magic figure is 7.5K and above.

Cheers Concrete

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Tue 14 May 2019 23:23
How to get a better APR - Prjpro

Thanks to everyone for your comments.

After some research, the APR I have been given is "normal" if you don't have property and you have less than 6 years of credit history in the country, or with a very low activity.

I was expecting the finance calculations were supposed to work more about affordability instead of credit history, but I was wrong. So, if you have less than 6 years with a low activity credit report (my situation) and no house.... Yo better save the money to buy the car in cash, otherwise the loan will cost you a fortune.

I still have to try some more options, if I can get a better APR I will update the post in case it can help someone in a similar situation in the future.

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Wed 15 May 2019 09:19
How to get a better APR - daveyjp

Check out a few local credit unions.

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