For some reason over here, vehicle loans are done on a simple interest basis. Basically, you want to borrow X over 5 years, so they calculate the total interest payable over that period and then add it (and fees) to the loan amount. Suddenly a 4% interest rate is nearer an 8% APR (excuse the rough numbers). The title of the car is also held by the bank, making selling it overly complicated!
If you want a set sum for a set period, then this is a good way to go.
However, if you want to be able the pay it off quickly, without any of the restrictions, then a personal loan from the bank may work out to be cheaper overall! If you increase your payments, you end up paying less interest, and accordingly less overall as the interest is calculated as compound interest.
Clearly, it will all come down to your personal situation, but it is worth considering the benefits of each.
Also, dealers will also occasionally provide discounted vehicle loan rates for new models - they pay the difference on the bank's standard rate to give you a cheaper rate in order to get the cars out on the roads and hopefully generate more interest. You'll normally see these offers in the papers.
Finally, some banks do run loyalty packages, such as HSBC status. I believe they charge you a monthly fee for the privilege, but provide discounts on loan rates - might also be worth looking into, as the fee might translate into an overall saving if you are buying a mid- to high-priced car...
For some reason over here, vehicle loans are done on a simple interest basis. Basically, you want to borrow X over 5 years, so they calculate the total interest payable over that period and then add it (and fees) to the loan amount. Suddenly a 4% interest rate is nearer an 8% APR (excuse the rough numbers). The title of the car is also held by the bank, making selling it overly complicated!
If you want a set sum for a set period, then this is a good way to go.
However, if you want to be able the pay it off quickly, without any of the restrictions, then a personal loan from the bank may work out to be cheaper overall! If you increase your payments, you end up paying less interest, and accordingly less overall as the interest is calculated as compound interest.
Clearly, it will all come down to your personal situation, but it is worth considering the benefits of each.
Also, dealers will also occasionally provide discounted vehicle loan rates for new models - they pay the difference on the bank's standard rate to give you a cheaper rate in order to get the cars out on the roads and hopefully generate more interest. You'll normally see these offers in the papers.
Finally, some banks do run loyalty packages, such as HSBC status. I believe they charge you a monthly fee for the privilege, but provide discounts on loan rates - might also be worth looking into, as the fee might translate into an overall saving if you are buying a mid- to high-priced car...