My work colleague has her heart set on buying a Mini Cooper S. The only problem is paying for it!
What is the best option for her: bank loan, hire purchase etc... and how does it all work as I am not too good on this! I have looked at the FAQs but don't think that anything covers the question.
Any help or experiences buying a Cooper S would be appreciated.
Charlie
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Alliance and Leicester do a deferred loan whereby you offset a final payment (perhaps upto 40% of the loan) for 3 years, perhaps. The costs, compared to paying off the whole amount over 3 years is greater; and the costs compared to paying off the whole amount over a longer period may also be greater.
You need to work out what you have (deposit), what you can afford (monthly payments), for how long (loan period), and the total cost of the loan (deposit + total number of payments). Also consider any manufacturer schemes.
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Related question, why do they in Right Car, Wrong Car always insist on looking at the % flat rate only?
Surely its the amount per payment multiplied by no of payments that matters, or is it just a TV "all done by mirrors" way of making them look smarter than they really are?
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Funny, years ago all you were quoted was flat rate. IMHO that makes it easy to work out repayments. Repayment = ((Amount x flat rate x no of years) + amount) /number of monthly payments.
eg 10,000 over 5 years @ 4% flat = ((10000*4%*5)+10000)/60 = £200 monthly.
I reckon the drongos who do RCWC don't have any more brain cells than me, I've never been able to work out APRs
:-)
Terry
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The reason why APR's are quoted is because they reflect a more acurate cost of borrowing.
Flat-rates so not take account of the fact that every time you make a payment, your outstanding debt has reduced.
A rough rule of thumb is that true interest (or "APR") is about double the quoted Flat-rate.
The current mortgage flat-rate is about 2.5% (5% apr)
The current "best-buy" personal loan flat-rate is about 4.5% (9% apr)
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On the right hand side of How to Buy & Sell, you will find a section titled "Buying on Finance".
Have you read that?
As for cheapest source of finance, assuming you have negotiated a low cash price, you borrow from:
1. Your mortgage lender by increasing your mortgage
or if you are not a home-owner with a mortgage,
2. Get a personal loan from the likes of online "banks" such as Tesco, IF, Cahoot, Direct Line, Nationwide, or Egg.
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>>The reason why APR's are quoted is because they reflect a more acurate cost of borrowing.
Actually not the intention.
The original intention was to bring a rate which could be used solely for comparative purposes. There being so many different ways of paying, insuring, borrowing, etc, payment terms and the like - that it was impossible to compare different loans. The APR was intended to solve this.
In principle the absolute value is not the point, the comparative value is.
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Mark:
You are probably right. But....
The original intention in the UK, AFAIK, was to give a more accurate measure of interest rates - so that different lenders rates could be readily compared.
The following link to an US site gives resons why it was introduced in the US.
what is APR?
Note the reference to "TRUTH" in the quote below taken from that site.
"The annual percentage rate (APR) is an interest rate that is different from the note rate. It is commonly used to compare loan programs from different lenders. The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. ......... The APR is designed to measure the "true cost of a loan." It creates a level playing field for lenders. ... "
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Try moneyfacts web site for current best buys.
for MONEYFACTS click here
www.moneyfacts.co.uk/framesets/mainframe.htm
"Moneyfacts Selections are prepared at our offices by our editorial staff. Moneyfacts is entirely impartial and receives no payment or commission for inclusion in our selections. We aim to show a good cross-section of products from the entire market."
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Jack,
>>The original intention in the UK, AFAIK, was to give a more accurate measure of interest rates - so that different lenders rates could be readily compared.
That's what I meant, you just said it betterer.
It was the comparative benefit they were striving for.
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My daughter bought a mini one, one month ago she did finance HP with BMW for 5K it was the cheapest money around without any protection about £155.00 per month although there was an arrangement fee of £80.00, not sure what that was for. My wife has ordered an S but wont get it untill at least November unless those in front drop out.
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