How To Avoid Motor Finance Overcharging

Feb 1 at 4:04pm by Personal Finance Claims

In UK, motor finance options may be readily available, but I would recommend that you think twice before agreeing to any particular plan, especially those that the dealer might be trying to hustle up to you. Your dealer might be selling the latest in cars and accessories, but when the issue of motor finance pops up, sometimes the dealer will try to push a deal which is not what you had initially intended. Dealers are entitled to commission on every motor finance plan that they sell and obviously they are not a fool to let go of this opportunity even if it means high interest rates and astronomical charges and penalties for the buyer.

To ensure that you get the most affordable motor finance deal, you will have to take certain precautions and follow the prescribed guidelines. The first thing you need to do is have a look at the APR (Annual Percentage Rate), which is the rate of interest as applicable on your motor finance loan. If the APR is not given in the offer document, you need to request the lender to provide you with the same. In UK, all lenders are required by law to disclose the APR before the deal is actually signed.

You may not find the APR on some offer documents because some lenders have become smart enough to show only the monthly rate of interest with a star sign (*) on top. The monthly rate of interest may be less than the APR and since the majority of buyers are quite unaware of this, lenders often use this tactic to lure in new gullible customers. So, if you do not consider the APR before signing a motor finance deal, it’s likely that you will end up paying a lot more than what you might have been expecting.

To get to the most affordable motor finance deals and to avoid paying more than you need, you should do additional research on all the different types of motor finance schemes that might be available. To make this difficult task easier, you need to go online, contact lenders specializing in motor finance and request them to make an offer. After you have the offers on your computer, you just have to compare them and assess exactly which offer best suits your specific needs and requirements. This way, you will easily be able to locate the most cost-effective motor finance deal that might be available and that you are happy to proceed with.

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