Car Loan Interest Rate

It could be that your deposit is to big. The bigger the loan the better the rate. Small loan they need to jack up interest in order to breakeven over the short period.
 
offered 7% however has to be over 6 years but i can take out a 25% residual. Standard bank private banking.
 
BMW finance are quite willing to give prime -5% linked at the moment
 
qwerty123 said:
Hi

Hope someone can help me , I want to find out if the interest rate they offered me is average/acceptable.

I've requested finance a R260,000.00 car, with a deposit of R130,000.00.

I'm 50 with a very good credit history, they are offering me interest rate of 14% over 3 years. It feels a bit high.

Thank you in advance.
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As stated in a more recent post I work for a bank. That interest rate is high. I know you havnt given much further info but keep in mind other factors were included in your credit analysis. Ie you may still have debt outstanding,banking with the bank you applied for is fairly recent,cash flow of how your account is conducted and I know you would have done a income and expenses application for that car loan for affordability. However on the info you have given with such a large deposit I see no reason (obviously need more info) as to why they gave you prime +6.5%. Also to respond prime is 8.5%. you can and should get a better interest rate than that with the info you stated,but more is needed for a more prudent result.
 
piranha786 said:
Bump... Whats the best you guys got recently?
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We're buying our first car.

It's a private sale. R117 000 for a 2010 Honda Civic Hatchback. We have no credit history. We're paying no deposit, no residual.

Wesbank is giving us 10% over 48 months. Does that seem reasonable?
 
No its not reasonable at all, but it will be about the best you will get unfortunately.
 
AlphaBravo said:
It could be that your deposit is to big. The bigger the loan the better the rate. Small loan they need to jack up interest in order to breakeven over the short period.
Click to expand...

This is true. Plead poverty. No deposit. Longest term. Once they get you as a client for 6 years, they are more willing to give a lower interest rate. Once you have signed, you can pay all of your extra cash in a lump sum towards the principal debt. Just make sure of two things...

- All of your lump sum payments go towards the pricipal debt, NOT the interest portion. This allows you to bring down the interest automatically.
- Make sure you will not be charged or penalized for making once off payments. Some companies are adding fine print to screw you if you pay your car off early
 
It's largely due to your very high deposit and request for a super short term loan.

It's unfortunately how they shalf those of us with good credit history and financial practises as they don't really make enough money from us as opposed to other clients who just go all in with no deposits and residuals and what not.

What worked for me somewhat was using a financial institution that's NOT my own bank as they obviously have less visibility of my records.

Or if you want to be hard arsed tell them "no deal, unless the interest comes down" which might also backfire on you or become a long drawn out process.
 
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