Comparison Rates Explained

Comparison Rates Explained

When choosing car finance, there are many factors that you will need to take into consideration before making a decision.

You will need to factor in things like on-going costs, up-front fees (establishment costs) and exit fees. These charges will add to the cost of credit and should also be compared when comparing interest rates.

A comparison rate is an indicative interest rate that combines the nominal interest rate plus fees and charges associated with the car finance facility. The comparison rate will give you an indication of the cost of credit over the life of the loan.

A comparison rate is definitely a good place to start when comparing car finance, however it is important also to research features of a loan such as direct debit facilities, repayment options and redraw.

A comparison rate includes the nominal interest, establishment fees and ongoing account keeping fees.

A comparison rate does not include insurance products, government and statutory fees and once off fees. Copyright.