Motoring News
Today, 18 January 2017Third of UK motorists face maximum APR on finance purchases
Nearly 1.5m Brits may be deterred from buying a new car thanks to interest rates of over 30% following poor credit scores
Around 1.4 million Brits may be deterred from purchasing a new car through finance this year due to poor credit scores forcing high interest rates.
According to research conducted by credit check company Clearscore, around a third of Brits have poor credit scores and would therefore be offered the highest annual percentage rates (APR) on finance car purchases.
For example, someone with a poor credit rating looking to buy a 2017 Land Rover Discovery, which costs from £43,495, would likely be faced with a five year finance deal commanding 31.6% APR, following a 10% deposit.
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After the five year term the buyer would have spent £40,672.57 in interest alone, or 94% of the car's overall value. A high credit score person faced with 5.9% APR would have paid just £7,775.66 in the same period, which represents just 18% of the car's value.
The same scenario on a £100,000 car would leave a poor credit score buyer paying £93,796.73 after five years. A high credit score buyer would pay less than £18k.
“We estimate that 33% of people fit into this lowest band,” a Clearscore spokesman told Autocar. “Given that 80% of cars are bought with car finance of some sort, we estimate that this issue effects around 1.4 million pe
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