First Response Finance Become APR-Led

Dec. 1, 2015 - PRLog -- First Response Finance started quoting customers in APRs instead of flat rates.

If you’re a customer looking to get any form of finance such as mortgage, credit card or bank loan you will be given an APR so you can compare like-for-like quotes. This is the standard for most areas of finance but is not widely used in vehicle finance as flat rates are still in use.  As a customer-focused company, First Response don’t believe this is easy for the customer to understand, especially when, legally, all documentation has to show the APR. In order for a customer to be able to compare vehicle finance they need the APR as this takes into account all fees that the customer will pay in their finance package.

To make the change to an APR-led company easier to understand First Response have created a video that dealerships can watch to gain a better understanding. Moving to APRs means that customers are able to compare loans from different companies in order to get the best deal. By allowing customers to compare loans elsewhere, First Response Finance are continuing to strengthen their business offer and leading the way in the sub-prime industry by abiding by new FCA regulations of being fair, clear and not misleading.

Video script

"You may have heard the saying “it’s like comparing apples to oranges”, that’s how we feel about comparing finance packages with a flat rate. Let’s look at an example.

2 companies might have similar products but with different ways of dicing the costs. 1 company might have a flat rate of 15%, which on its own doesn’t mean an awful lot but if you add another product with a flat rate of 21% you may assume that the original product, in this case the apple, is better. So let’s take a closer look.

Although the apple has the lower rate it also has fees totalling £799 however, the orange with the higher rate, has no fees.  Looking even closer the apple has a monthly payment of £273 with an APR of 42.66%. The orange has a monthly payment of £271 and an APR of 41.78%.

By looking at two products with a flat rate you’re comparing apples and oranges. The only way you can truly compare is by looking at all the information but by looking at the APR we can be sure that we are comparing apples with apples.

So which one’s the cheaper option? This product [the apple] has a lower APR and a total lower repayment.

At First Response Finance Ltd we believe that it is important to be fully transparent with our customers. With this in mind we use APR when discussing and comparing rates so that we’re comparing apples with apples.’

You can view the video using the link http://www.youtube.com/embed/yLGF8g4JAWE