Understanding APR: What Does 15.9% Really Mean?
APR can be confusing. Learn exactly what it means, how it's calculated, and what you should look for when comparing car finance deals.
Demystifying APR in Car Finance
APR, or Annual Percentage Rate, is one of the most important numbers in car finance, but it's often misunderstood. Let's break it down.
What is APR?
APR represents the total cost of borrowing money over a year, including:
How APR Affects Your Payments
A 15.9% APR on a £15,000 loan over 4 years means:
Compare that to a 7.9% APR:
That's a difference of £1,440!
Representative APR vs Personal APR
**Representative APR**: The rate advertised by lenders. Only 51% of accepted applicants need to receive this rate or better.
**Personal APR**: The actual rate YOU receive, based on:
Tips for Getting the Best APR
1. **Improve Your Credit Score**: Even a small improvement can lead to a better rate
2. **Save a Bigger Deposit**: Larger deposits often mean lower APRs
3. **Compare Multiple Offers**: Don't settle for the first offer you receive
4. **Consider the Total Cost**: Look beyond the monthly payment to the total amount repayable
5. **Negotiate**: Some dealers and lenders may be willing to negotiate
Common APR Mistakes
WHOOSH! Finance Promise
At WHOOSH!, we believe in transparency. We show you the total cost of your finance, including all fees and charges, so you can make an informed decision. Our 60-second quote gives you a realistic idea of what you can expect.
Ready to see what rate you could get? Apply now!