PERCENTAGES AND POUNDS - POUNDS AND PERCENTAGES
" Im looking at the bike you have adertised, whats your APR?" is a question we get a lot at KJM..and the answer to this very important question is a simple one - It`s not our APR it`s yours.
Now if you`re like me and don`t want to read all the way to the end to find out what we mean by that let`s get it out of the way first, then put a little extra information behind the statement for those who like that sort of thing.
So Here It Is - We sell motorcycles and scooters, we don`t sell money but the finance company do, which helps you buy it and, of course, us sell it.
As we all know lending money has a risk to it, which is why they charge interest to make it worth their while. The risk to them is two fold, the bike and the person wanting to borrow the money for it.
What does that mean I hear you ask? Simply put, for example, they don`t want to borrow £12,000 for a bike that`s worth £8,000, a bike that is too old for them to see a value if everything went wrong or is over a period thats too long.
Now comes the person. Every single one of us has a credit profile or if you prefer "score". We all have a borrowing capacity and this can change for each and every one of us - This is why the finance company need information from you, including your credit score, when you apply for finance with them. It is from this information they decide to make an offer or in some cases not.
With these two elements they will assess the risk, decide what return they need based on that risk and make an offer - Less risk, less interest and lower APR & conversely more risk is going the other way.
Summary - There you have it, the APR is based on your risk to the finance company along with us doing our part by having the right bike at the right price (we will cover how KJM do this for its customers in a future Blog)
A Bit For The Die Hard Fans - Read On
The term APR has been around a long time and is another we have all heard, we all know we need to look at and, if your like me your being honest, don`t know much beyond low is good - So what is it really?
Well according to the FLA this is it...
Which to me and perhaps most of us looks like Vordermans been let loose with a marker pen.
Now this is what I do know, there are a lot of factors in that little lot and whenever I financed anything I know I pay in pounds not percentages. So when comparing offers I find out exactly how much the total cost of borrowing is before I go ahead.
