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Confused on APR offered during car deal

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Contributor

Confused on APR offered during car deal

Hi everyone,

 

I need some input. We purchased a 2016 Range Rover sport yesterday. When we went into the finance office we were offered 2 options by Chase. 9.5% for 72 months financing or 3.5% for 60 months? Of course we were focused on the lowest APR possible and we are ok with the payment but why such a vast difference between the 2? Really hoping we didn't make the wrong decision Smiley Sad

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Valued Contributor

Re: Confused on APR offered during car deal

Congratulations on your new Range Rover! 👍





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Message 2 of 11
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Valued Contributor

Re: Confused on APR offered during car deal

The car payment should have been almost the same with a 6% difference in APR.

If it was more than a $25 difference, something is wrong.

Due to age and brand of the car, it makes sense that the 72 month would have higher APR, 6% difference is quite a bit though.

 

If you can afford it, the lower APR is the right choice.

What was the payment difference?

 

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Valued Contributor

Re: Confused on APR offered during car deal

Common for many lending institutions to have higher rates as loan terms becomes longer.

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Valued Contributor

Re: Confused on APR offered during car deal


@Shooting-For-800 wrote:

Due to age and brand of the car, it makes sense that the 72 month would have higher APR, 6% difference is quite a bit though


You made the correct decision !

6% is a very very large difference for a one year longer loan.

Smart to not take that offer.

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Super Contributor

Re: Confused on APR offered during car deal

Congratulations on your approval!

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Contributor

Re: Confused on APR offered during car deal

Payment was virtually the same (give or take $20 or so) so we went with the 5 year option for the lower APR. 

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Contributor

Re: Confused on APR offered during car deal

Thank you, I'm feeling much better about or decision! 

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Established Contributor

Re: Confused on APR offered during car deal

Dealers and banks are offering longer terms. Consumers keeping cars longer. The longer the term, the higher the rate. 6% is high, but not uncommon. The longer the loan, higher risk of default. You chose right. Enjoy your Rover. 😊 

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Frequent Contributor

Re: Confused on APR offered during car deal

The bank probably figured at any longer than the 60 months, you'd be spending all of your money on maintenance and not have any money left for them 🤷🏻‍♂️






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