Kearys - Finance Issues

Mardyke

Has anyone here experienced been presented with car finance interest rates of approx 14%?

I would have thought a normal rate these days was about 6%.

ofcork

Bought a 2012 avensis from kearys in 2014 think the rate was around 12%

Cork Trucker

I’m with bluestone Finance, interest is High enough,

ofcork

My finance with kearys was through alphera.

Bus Wanker

On a used car it's largely at the discretion of the finance salesman. The more interest they charge, the more commission they get from the finance house. Alphera, BOI, bluestone etc.
Its been a couple of years since I worked in the car industry but credit union car loans were at 6.9% so we usually hovered around 9. I certainly wouldn't be happy going over 10 as a consumer.
Of course if the customer has a bad credit rating or something the rate might be slightly higher.

Cork Trucker

Bus Wanker wrote: »

On a used car it's largely at the discretion of the finance salesman. The more interest they charge, the more commission they get from the finance house. Alphera, BOI, bluestone etc.
Its been a couple of years since I worked in the car industry but credit union car loans were at 6.9% so we usually hovered around 9. I certainly wouldn't be happy going over 10 as a consumer.
Of course if the customer has a bad credit rating or something the rate might be slightly higher.

I’m nearing the end of my 5 year term with bluestone, first time being approved for finance, does the rate of finance come down if you take out a new agreement? I’ve never missed a payment

Bus Wanker

Cork Trucker wrote: »

I’m nearing the end of my 5 year term with bluestone, first time being approved for finance, does the rate of finance come down if you take out a new agreement? I’ve never missed a payment

In my experience it's generally the car dealerships finance salesman or dealerships policy that sets the rate. Banks usually have a minimum rate of 7-8% but dealerships can charge above that and the banks will pay them more commission.

If you have a bad credit history or no real history as just started to work/ no previous loans then the minimum rate could be higher as some banks would not give quotes.

One trick salesmen like to use is early on to ask how much you can afford to spend a month. For example you say 250. They will know even if they could get you in the car for 230 at 8-9% the reality is you can afford 250 and you like the car so they'll jack it up to 249 at 13% as they know you will likely sign. In return they will get a lot more commission from the bank.

Some people think that car dealerships make money selling cars and the finance is just a service to get that done but in reality it's another revenue stream that they have some control over. In almost all cases you would be better sorting the finance yourself directly with a bank or credit union. ( I'd always recommend credit union as at 6.9% and can pay back lump sums saving more money).

The dealerships are selling you the exact same thing a bank would and charging a decent amount for the privilege so my advice is to always sort finance yourself if possible.

*calculations above are only rough examples to show the point.
**I'm sure some dealerships do just use finance as a way of getting cars out the door so give the customer the best rate but I'd reckon anyone charging over 10% is not.
***My examples mainly speak for used car rates. Usually new car loan rates are lower and vary by manufacturer.

Mardyke

Thanks for the responses. Interesting.

It sounds like Kearys are prone to some of the tactics mentioned above.

Very unsavoury if it's an intentional policy of theirs.

My recommendation is to be wary of Kearys.

Bus Wanker

Mardyke wrote: »

Thanks for the responses. Interesting.

It sounds like Kearys are prone to some of the tactics mentioned above.

Very unsavoury if it's an intentional policy of theirs.

My recommendation is to be wary of Kearys.

It's worth noting I have no relationship at all with Kearys so can't comment on that but only my own experience.

But yeah if you can get a loan with the credit union for 6.9 and a dealership charges 14 there's something wrong somewhere.

I think a lot of places rely on the fact the customers don't question it. I mean I said I could afford 250 a month and look the figure comes in at around that. Perfect. There is an assumption that the bank just spit out that figure and it was their lucky day that it was within budget. But yes often times the reality is a little different.

Lantus

Credit union is 8.6 currently and skoda sell used at 3.9. you can do a lot better.

ofcork

Just had a look back at my agreement interest was 12.6%

Local Nissan dealership offered me about 12% on a new Micra before. My local credit union is about 6-ish%

MrDerp

Caveat Emptor

Know what you’re taking about before a negotiation. There’s a reason weekly/monthly rates are always quoted for finance ‘drive a new golf for only €90 per week’. It’s so you’ll think, hey I make 500/week I can easily afford a new golf. You’re not meant to think about the 5 year loan / pcp with large down payment and settlement.

I Ask, ‘how do your rates compare to AIB, I do all my banking with them?’ And either the garage offers to arrange the loan with AIB for me (this costs me a small facility fee which I’m willing to pay because it means I can walk up a few days later, sign in the garage and drive the car away) or they match it with the finance house because I’ve just let them know I researched rates beforehand. They’ll just take the standard commission because they have targets, and concentrate instead on puncture/scrape insurance hard sell

The same goes for buying TVs etc. I like to buy these things in store, but they’re always cheaper online. When I go into well known electrical retailers I hold my phone out, on their web page and immediately the sales person is like ‘there’s a discount on that, it’s online but they mustn’t have put out new signs yet on the floor’. Ooh thanks for the big favour mr salesman.

Back to the point, the only reason you should be signing higher credit terms for car finance than the big retail banks offer is if you have bad credit or you’re starting out.

Be ready for them, because they’ll see you coming a mile away

MrDerp

MrDerp wrote: »

Caveat Emptor

I'm somewhat like you, in that I know loan rates, I know how much a loan would cost from Bank of Ireland or my local Credit Union.

When I was looking at a micra, the forecourt price was about 18k. The loan was over 3 years, and at about 12%. They tried to upsell a service pack, too, into the price of the car.

The service pack included 3 services, and were only about €10 cheaper than buying the services in cash as and when you need them (but the price of the services would be added to the loan, meaning you'd pay more for them when you add on the additional interest you'd be paying).


I asked about early repayment fees, and was told the loan can't be repaid early. It must be paid in accordance with the monthly payment schedule, however, the interest is front loaded so you're paying every cent of it, regardless of whether you make an effort settle the loan early or not.

In other words, the 18k car would actually cost 21.5k.


Throughout all of this, the girl doing the finance arrangements was constantly encouraging me to 'drive away today' and 'sure it's your car' and repeatedly telling me 'you know you want the car'. It was all very off-putting and came across really desperate. Needless to say I left in the same car I arrived in.


Over the next two weeks I got about a dozen calls, offering to knock money off, throw in free services, etc. but I didn't bite.

I can see exactly how it is that some people end up in over their heads with debt on these kinda things.

Harika

ECB hands out money to banks for 0% interest, who hand it down to you for 8-20% interest. Siri show me a broken banking system.
Btw if you want to cry https://www.postbank.de/privatkunden/produkte/kredite/privatkredit-direkt/kreditrechner.html
As example Germany offers loans for cars for 1,5%

Truckermal

Absolute madness getting Car finance on those rates! Do ye not realise how much the Car will cost at the end of the term?

Iodine1

Harika wrote: »

ECB hands out money to banks for 0% interest, who hand it down to you for 8-20% interest. Siri show me a broken banking system.
Btw if you want to cry https://www.postbank.de/privatkunden/produkte/kredite/privatkredit-direkt/kreditrechner.html
As example Germany offers loans for cars for 1,5%

Yes, Germans pay back the loan or the asset is recovered and sold. In Ireland this results in protests in the street, and years of wrangling restructuring and paying nothing and Paul Murphys and the like stirring it up. Hence German banks won't offer loans in Ireland and Ulster bank can't wait to get out.

Mardyke

Truckermal wrote: »

Absolute madness getting Car finance on those rates! Do ye not realise how much the Car will cost at the end of the term?

I think the problem is that the focus is on the monthly payments and not the interest rates. Its a deliberate and dirty tactic employed by the likes of KEARYS.

Even on the loan agreement that they supply there is no mention of the interest rate.

Truckermal

Mardyke wrote: »

I think the problem is that the focus is on the monthly payments and not the interest rates. Its a deliberate and dirty tactic employed by the likes of KEARYS.

Even on the loan agreement that they supply there is no mention of the interest rate.

You would be amazed though how easy it is to catch people!

Irishphotodesk

Truckermal wrote: »

Absolute madness getting Car finance on those rates! Do ye not realise how much the Car will cost at the end of the term?

As someone who has never taken a car loan, but has taken plenty of personal loans, I would have no issue with paying a decent amount of interest if I get access to the item and can use it (and can afford the repayments).

My wife and I have fought many times over my willingness to accept credit (I have taken loans in the past just to improve credit rating, make the repayments with the original loan and pay the interest over the time)

- I took out a 10k loan in 2019 to purchase new camera gear, I didn't have the money available to spend so in theory I'm paying approx 12k back to the bank over 3yrs, the camera gear has allowed me to claim cashback on the purchase so €1700 was claimable, the purchase allowed me to write it off against income tax and depreciation over the term of the loan, by the time it's paid off the gear will probably be worth 4-5k - but will have earned me a lot more, even if the interest rate was higher, it would be a tax write off... The point being that sometimes the interest rate doesn't matter to the person purchasing the vehicle, sometimes it's a tax write off.

I would view a car as a piece of equipment, whatever the cost it has a purpose (to get from A to B etc) - I don't need a more efficient vehicle or fancy shiny one, just need one that can get me from A to B, if I do purchase using finance - it will be something that will benefit me from a tax perspective and not because it's new and shiny

farmerval

Why do you think all cars are advertised as €XXX per week.

Looking at Keary's website the banner at the top states that HP is 8.9%

I looked at a local second hand car dealers offer and the APR on the finanace he was offering appeared to be at less than 9%

Go into the Competition and consumer protection commission website and you can input the amount you want to borrow and the term and they throw up the rates available.

I just threw in
€10K over three years and the rates varied from 6.3% to 12.6%
The difference between the lowest and the highest is €30/ month which is €1,080.00 extra because the consumer was too lazy or not financially savvy enough to sit down for ten minutes and check out the various possibilities.

Bass Reeves

You just now and again have to watch those money programs. It amazing how careless people are with money. 14% if it is true is a crazy rate. Even in today's interest climate 6-7% is a crazy rate. Credit unions cannot lend the money they have on deposit and cannot pay dividents The reason is that lending rates should be sub 5%.

Mardyke

What consumer agency should people contact if they see issues of car dealers peddling crazy interest rates?

Irishphotodesk

Mardyke wrote: »

What consumer agency should people contact if they see issues of car dealers peddling crazy interest rates?

Really isn't any that can do much - if people are not willing to do their own due diligence.

CCPC are the competition authority but it's only if/when there is deliberate mis-selling they might be involved.

You could always complain to SIMI about the practice but it could fall on deaf ears.

Widdensushi

Mardyke wrote: »

What consumer agency should people contact if they see issues of car dealers peddling crazy interest rates?

Talk with your feet

Outkast_IRE

Mardyke wrote: »

What consumer agency should people contact if they see issues of car dealers peddling crazy interest rates?

If people dont understand that you need to check APR before taking a loan or finance , then there is no consumer agency that will be able to help them.


Stuff like this is why Home Economics needs to be mandatory and cover basic financials.

Mardyke

Mardyke wrote: »

I think the problem is that the focus is on the monthly payments and not the interest rates. Its a deliberate and dirty tactic employed by the likes of KEARYS.

Even on the loan agreement that they supply there is no mention of the interest rate.

Folk should really be able to calculate their total payments per the plan and compare to the price of the item.

Deposit + (monthly X #months) + any other payments = total.

The loan agreement appears at time of signing so a bit late in the day

Cape Clear

Mardyke wrote: »

I think the problem is that the focus is on the monthly payments and not the interest rates. Its a deliberate and dirty tactic employed by the likes of KEARYS.

Even on the loan agreement that they supply there is no mention of the interest rate.

Is that legal? I thought it was mandatory for the Apr and other pertinent information to be included in these documents.