Borrowing money to buy a new car can cost a lot less from some lenders. There is plenty of competition out there but you need to compare rates carefully to ensure you are getting the best deal.
If you can get zero percent finance from a dealer (Opel has offers at the moment) – you will be doing well. You might not be able to haggle on the price as much – but 0% finance on 15000 euro over 3 years could be worth as much as 3000 euro in saved interest charges.
Ford are offering finance deals of 4.9% APR – as are Toyota. Mazda are advertising rates of 6.9% APR . Usually – car companies are not lending you the money – they are offering hire purchase. Be aware that taking out a personal loan is different to getting a hire purchase agreement. With a loan – you own the car outright as soon as you buy it. With a HP agreement you don’t own the car until you make the last repayment, so you do not have the option of selling it and using the money to pay off the balance on your agreement.
Some lenders advertise car loans as if they are different rates to loans for other purposes – but in most cases the car loan rates are just the same as a personal loan for any other purpose (except mortgages)
The rate of interest may vary, you will usually get a lower rate if you borrow more.
NIB are offering loans with an APR of 10.75% (on amounts over €10k)
On a €15000 loan over 4 years the monthly repayments would be €382.28 – total repayable €18,349.44 – total cost of credit €3349.44
AIB – At AIB a €15000 four year variable interest rate Car loan, will have monthly repayments of €384.64 , APR 11.11%. If the APR does not vary during the term of the loan, the total cost of credit would be €3462.72
BOI – The same 4 year loan from BOI will have an APR of 13.0% , a monthly repayment of €397.10 and a total cost of credit of €4,060.99. The NIB loan would cost you €667 less.
Tip: Try to match your repayment plan with the length of time you’ll have the car. Borrowing over a longer term means you have lower monthly repayments but it will cost you a lot more in interest over the life of the loan.