VEHICLE FINANCE TERMS EXPLAINED

Add those into the mix and sometimes it can feel like public transportation is the better option! If it's not the APRs then it's the CRAs, and don't get us started on the DMPs and the FCAs. While it is all useful information that will certainly help you get your new wheels pronto (regardless of financial constraints) understanding the terminology can be overwhelming and time-consuming. Let's try and explain some of this jargon for you.

Research and application stage

As with most things in life, sufficient research is paramount before committing to something. Especially when that 'something' is a new car and subsequent finance settlement. In the research and application stage, you'll likely come across various terminology that just might boggle your brain and marvel your mind. But it's important you pay close attention. Here are some key things to look out for:

APR (Annual Percentage Rate): Expressed as a percentage, this is the cost you'll pay each year to borrow the money for your car. There's your loan amount, and then how much money you'll pay back on top of that (your APR), which includes any fees.

Representative APR: If you spot a loan that's advertised with a 'representative' APR, it means that at least 51% of customers have received a rate that's the same as, or lower, than the figure advertised.

Interest Rate: The amount you'll be charged for borrowing money from a lender will be determined by the interest rate. This is also expressed as a percentage but doesn't include any other associated costs.

Fixed Rate: This is the rate of interest that you'll pay a...