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Car finance - Garage v Bank

  • 28-07-2018 1:35pm
    #1
    Jjjjjjjbarry
    Closed Accounts Posts: 486 ✭✭


    Apologies if this is a frequently asked question but;

    What are peoples thoughts on financing a car through the garage's finance offer?
    Garage offering me 7.9% rate and wrote down how much I'd be paying back per month etc. I called the credit union and they said their interest rate is 9.75% and from a google search, my bank offers 8.95% so looks like the garage is the cheaper option. I don't change my car every couple of years so would still have it for the duration of the loan so to me, it looks like I should take the garage offer but I've heard other people say before that you should never do that as it'll cost you more. Any thoughts? Many thanks for reading.


Comments

  • #2
    hanaimai
    Registered Users Posts: 207 ✭✭hanaimai


    What sort of credit agreement is the garage offering you - PCP, hire purchase?


  • #3
    mickdw
    Registered Users, Registered Users 2 Posts: 23,417 ✭✭✭✭mickdw


    The garage finance deals are competitive however there is nothing like having the funds independent of dealer leaving you more freedom and perhaps better bargaining power re discounts.
    As far as I can work out, credit union is very expensive. Poor rate plus considering they tie down some savings also, it seems stupidly expensive borrowing.


  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,727 Mod ✭✭✭✭Henry Ford III


    Garages don't lend. It'll be done by a bank in the background.

    It's up to you to get the best value.


  • #5
    mickdw
    Registered Users, Registered Users 2 Posts: 23,417 ✭✭✭✭mickdw


    Henry Ford III wrote: »
    Garages don't lend. It'll be done by a bank in the background.

    It's up to you to get the best value.


    That is a given but there was a time when garage finance was an absolute piss take. Now, it appears to be on a par with the main stream banks personal loan lending rates.
    Considering it is many times easier to quality for car finance than for a personal loan in todays market, the garage finance is very useful for some.


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