Car Finance on a Plate

Former ice cream man Afzal Kahn has got a lot on his plate – £440,000 to be exact.

That’s how much he spent on the registration number "F1" at an auction held by Essex County Council. His number plate is worth more than his car – and considering that is a £300,000 McClaren SLR that’s saying something.

Quite what it says about the millionaire, who runs a car design business in Bradford, is anyone’s guess but he’s really happy with his £440,000 number plate which works out at £220,000 for the "F" and another £220,000 for the "1".

Afzal, 37, says: "It stands for Formula 1 and was worth every penny. Everyone will recognise my car now. It’s a great number on a great car."

If you’ve enough on your plate just buying a car Sun Money can give you some advice on the best financing deals. There are two main options open to you; either a traditional loan through a bank or building society or the car dealer or a hire purchase agreement.

When it comes to loans the big decision is the interest rate – car dealers will offer deals but often their rates are worse than those from loan firms. Look out for the APR, and make that the number you focus on.

Click here for loan rates..

The amount you will pay will vary according to how much you require, with larger loans being paid back over a longer period generally costing you less per month in terms of interest and repayments but more over the term of the loan.

The Bank of Ireland is offering a promotional fixed rate of 6.9 per cent APR on car loans of £20,000 or more over five years. Halifax has just launched its new car loan deal, with fixed rates of 6.5 to 8.8 per cent, depending on how much you borrow.

With loans the provider will in many cases allow you to factor in related costs such as car insurance and road tax so it’s worth considering the total cost of running the new car before deciding how much you need.

Finally, if the repayment scheme looks set to be fairly lengthy it may be worth while looking for a lender that offers repayment holidays. Though it’s not a good idea to be permanently delaying the payment, a one off deferral may be useful if other demands suddenly crop up. You’ll need to ensure this is on offer before taking the loan, however, as it probably won’t be approved afterwards.

A hire purchase agreement can be more complex, and need to be carefully checked before being agreed to.

Hire purchase agreements essentially differ from loans in that you don’t own the car at all until you’ve made all the payments. The agreement should contain all the details on the number of instalments and the full hire-purchase price of the car.

There are also catches to watch out for. Interest-free credit offers often sound like a fantastic deal but if you fail to make all the payments in the stated period you’re likely to face some huge interest rates. You should also watch out for so-called balloon payments – a large sum in the last month of the arrangement that is much higher than the other payments. If this takes you by surprise and you’re unable to pay then those higher rates could come knocking.

Above all it’s important to check that any garage offering a finance package is an authorised credit intermediary. This can be checked at the website The National Consumer Agency, www.consumerconnect.ie.

Leave a Reply

Your email address will not be published. Required fields are marked *