Desert Orchid
Senior Jockey
- Joined
- Aug 2, 2005
- Messages
- 25,037
Mrs O wants a new car so I'm the one who has to do all the hoofing around phoning and researching deals etc.
I'm usually pretty good at negotiating good deals on cars but I've never quite got my head round the difference between Flat interest rates and APR. I know that as a rule of thumb if you double the Flat rate and take off a percentage point or so, you get something close to the APR, so 6% "flat" will equate to something like 11.9% APR.
Yesterday, one dealer seemed quite keen to sell me a car and offered 1.5% flat (over a maximum of three years) which, he said, worked out at 4.5% (or thereabouts - I can't remember the exact figure but it was more than multiplying by 2 and taking off a point or so) APR.
Can anyone explain in very simple terms what the difference is and how to calculate accurately them?
I'm usually pretty good at negotiating good deals on cars but I've never quite got my head round the difference between Flat interest rates and APR. I know that as a rule of thumb if you double the Flat rate and take off a percentage point or so, you get something close to the APR, so 6% "flat" will equate to something like 11.9% APR.
Yesterday, one dealer seemed quite keen to sell me a car and offered 1.5% flat (over a maximum of three years) which, he said, worked out at 4.5% (or thereabouts - I can't remember the exact figure but it was more than multiplying by 2 and taking off a point or so) APR.
Can anyone explain in very simple terms what the difference is and how to calculate accurately them?