How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Mr. Wilson Your Own Question

Mr. Wilson
Mr. Wilson, Teacher
Category: General
Satisfied Customers: 5229
Experience:  M.A., M.S. Education / Educational Administration
46856550
Type Your Question Here...
Mr. Wilson is online now

We are looking to buy a car and have found one that is £5,000

Customer Question

We are looking to buy a car and have found one that is £5,000 with a fixed APR of 7% a year.

Upon asking if we put a big deposit down (say £3,000) would we be paying less interest, they said no and in fact would end up paying more.

After looking up fixed-apr I understand now that no-matter what you are paying the interest on the initial sum... but how could we end up paying more if we put a bigger deposit down?
Submitted: 3 years ago.
Category: General
Expert:  Mr. Wilson replied 3 years ago.
Hello, my name is Greg and I am happy to help on this question.

You would NOT be paying more in the long run. The APR on the car is the interest you would be paying on the amount you are financing.

If you take out financing on the £5,000 at 7% APR for 5 years, you would be paying you would have £940.36 after 5 years and be paying £5,940.36 at the end of the 5 years.

If you put £3000 down, that means you are only financing £2000 of the amount at 7% APR for the 5 years. This would result in £376.14 in interest over those 5 years. Therefore, you would have paid £5,376.14 total for the car (the £3000 down, the £2000 financed and the £376.14 interest).

You would save a total of £564.22 over the length of the 5 year loan. Even if the loan was shorter, you would still be paying less. The APR financing is only applied to the amount you end up financing - not the selling price of the car.

I hope this helps.

Have a wonderful week and I hope you visit us again soon.
Customer: replied 3 years ago.

Would you know why they are saying it would end up costing us more if we put more of a deposit down?


 


I'm guessing they are just pushing us off the idea so there is more interest due?

Expert:  Mr. Wilson replied 3 years ago.
Sorry about that delay. Unfortunately I think you are right. The more money you finance, the more money they make in the long run. You only pay financing on the amount you borrow.

Greg

What Customers are Saying:

 
 
 
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
< Previous | Next >
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I Couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Dr. Y.

    Dr. Y.

    Urologist

    Satisfied Customers:

    15021
    Specializing in general urology and reconstructive urology.
< Last | Next >
  • http://ww2.justanswer.com/uploads/lyeung1/2010-07-25_032152_tn_IMG_0241.JPG Dr. Y.'s Avatar

    Dr. Y.

    Urologist

    Satisfied Customers:

    15021
    Specializing in general urology and reconstructive urology.
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7069
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/drhearne/2009-11-8_74742_monika_hearne2.jpg Monika Hearne, M.D.'s Avatar

    Monika Hearne, M.D.

    Board Certified OB/GYN

    Satisfied Customers:

    5180
    With experience and compassion, I treat my patients like family.
  • http://ww2.justanswer.com/uploads/BI/birddoctor/2012-6-22_173214_birddoctor.64x64.png Dr. Pat's Avatar

    Dr. Pat

    Bird Veterinarian

    Satisfied Customers:

    2863
    25+ years working primarily or exclusively with birds
  • http://ww2.justanswer.com/uploads/dermdoc19/2010-09-30_160749_Photo_122807_015.JPG dermdoc19's Avatar

    dermdoc19

    Dermatologist

    Satisfied Customers:

    2779
    30 years practice in general and cosmetic dermatology
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    2733
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/FA/FamilyPhysician/2013-8-31_191624_JA550x500Photo.64x64.jpg Family Physician's Avatar

    Family Physician

    Doctor

    Satisfied Customers:

    2418
    GP with over 27 years experience including emergency medicine