Do you Know Your APRs From Your Elbow?

LONDON, UNITED KINGDOM – February 4, 2011: Fewer than one in three borrowers know the interest rate on their loan, according to research by Autoquake.com, the UK’s leading online car retailer.

Autoquake asked 1,000 members of the public if they knew the APR (annual percentage rate) on their car finance, bank loan or credit card. More than a third (36%) said they had a vague idea, 28% didn’t know, and 5% admitted they did not understand what APR meant. Just 31% were confident they knew how much interest they were paying on the money they owed.

Borrowers in the north east are most on top of their finances. Almost half (49%) know how much interest they are paying. At the opposite end of the scale, just 13% of borrowers in Northern Ireland are sure they know their APR. The same percentage of Northern Irish admit they don’t know what APR stands for.

Londoners are least likely to know how much they are paying to borrow. More than a third (36%) say they don’t know the APR on their credit arrangements.

Autoquake’s CEO, Dermot Halpin, said: “When money is tight, it pays to keep a close eye on interest rates. We’re surprised that so few car buyers and other borrowers are sure how much they are paying in interest.”

Halpin has this advice for anyone about to buy a car on finance: “Find out the APR and the total amount repayable. Don’t just focus on the monthly payments – they’re only part of the picture.

“Think carefully about the type of loan you take out, too. We’re launching a new car finance section on Autoquake.com which talks car buyers through the pros and cons of different kinds of car loan, and has a glossary explaining terms like APR.”