Approved Car Finance

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David J. Button - 17 Apr 2004 12:09 GMT

Mate of mine has just bought a car from Approved Car Finance. It's a 1998
Suzuki Baleno which I see go in Autotrader for about £1500 to £1995

The purchase price was £5000 - he gets £1000 trade in for his old vehicle
and £225 cash back on the deal.

So he's financing £4000 at 29% and paying £39 a week over 3 years.

So for a £2k car, he's paying £6084 !!!!!

And he thinks he has got a good deal!!!

Be warned won't you???

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Pete Smith - 17 Apr 2004 14:29 GMT

> Mate of mine has just bought a car from Approved Car Finance. It's a 1998
> Suzuki Baleno which I see go in Autotrader for about £1500 to £1995
[quoted text clipped - 3 lines]
>
> So he's financing £4000 at 29% and paying £39 a week over 3 years.

Holy sh.t! Not even Yes! are charging 29% any more. They're charging an
eminently decent rate of 19%[0]

Does he have a bad credit history, or is he just stupid?

> So for a £2k car, he's paying £6084 !!!!!

Does the UK have usury laws?

> And he thinks he has got a good deal!!!

Someone did, but it wasn't him!

Pete.

[0] When someone credit worthy can get 5.9% On a 10k loan over 5 years, this
makes 5564 interest to 1571 interest.

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Tim S Kemp - 17 Apr 2004 14:58 GMT

> Mate of mine has just bought a car from Approved Car Finance. It's a 1998
> Suzuki Baleno which I see go in Autotrader for about £1500 to £1995
[quoted text clipped - 9 lines]
>
> Be warned won't you???

All the places that tie the car to the credit are bad news. Any dealer who
can be arsed can get credit for the worst people - ex bankrupts, CCJs,
whatever. Yes the rate will be bad but the car will be the right price. Yes
/ Approved / Carcraft etc are making money at both ends - they are finance
houses with movable security for the finance.

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Leyland_Leopard - 17 Apr 2004 21:14 GMT

"Tim S Kemp" <news@timkemp.karooSPAMTRAP.co.uk> >

> All the places that tie the car to the credit are bad news. Any dealer who
> can be arsed can get credit for the worst people - ex bankrupts, CCJs,
> whatever. Yes the rate will be bad but the car will be the right price. Yes
> / Approved / Carcraft etc are making money at both ends - they are finance
> houses with movable security for the finance.

Is Carcraft the same kind of operation, then?

I had assumed (not knowing much about it, admittedly) that places like Yes
and Approved negotiated the finance first, then found a car to match,
whereas Carcraft gave you more options (such as paying cash, or
self-financing, etc) in addition to using their own finance house.

What about the adverts for Carcraft that say "we can pay off your finance
(even negative equity), upgrade your car and reduce your monthly payments".
I'd assumed this was by extending the term - charging a ridiculous rate of
interest doesn't seem to make this kind of deal possible.

I'm probably being naive!

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Tim S Kemp - 17 Apr 2004 21:17 GMT

> What about the adverts for Carcraft that say "we can pay off your finance
> (even negative equity), upgrade your car and reduce your monthly payments".
> I'd assumed this was by extending the term - charging a ridiculous rate of
> interest doesn't seem to make this kind of deal possible.
>
> I'm probably being naive!

The operative word is OR not AND.

Carcraft offer good rates on high margin cars to low risk people. It's all
about finance and warranty, very little to do with cars. If you know what
you're doing it's not the worst way to buy a car. Talk cash to them and they
show less interest, and are tough to get discount.

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