Direct Line Car Loan
The Direct Line Car Loan rate is exceptionally low for smaller sums; so if you're borrowing a small amount to top up cash you already have to buy a better car, then this could be the right deal for you.
Direct Line Car Loan examples (correct at publication date, uninsured):
| |
Monthly Repayment |
APR |
| £3000 across 2 years |
£133.92 |
6.9% |
| £5000 across 5 years |
£98.20 |
6.9% |
| £10000 across 7 years |
N/A |
N/A |
|
Companies like Direct Line keep their costs low (and share that benefit with you) by not having branches like banks. The products are simple and they don't want to see you in person. But that also means the products are inflexible- Direct Line don't insure particularly bad drivers, and neither will they lend to people with bad credit; so only apply here if you're in the 80% or so of people with good credit and the ability to prove it. A credit check will be carried out to ensure you fit their criteria.
With the Direct Line Car loan, there is no payment break offered, though, so you'll start paying right away. A car will only last you say, five years and you shouldn't borrow heavily on a purchase which will be "used up" long before the loan is complete, so your Direct Line Car Loan won't be accepted on a longer term than five years. Despite offering car insurance with lots of frills like breakdown cover, surprisingly there are absolutely no extra benefits for getting your car loan here- they keep rates low by dishing out cash and nothing else!
Where the Direct Line car loan really scores, though, is by breaking the normal rules of lending. A "best" rate usually masks the fact that such a rate is only on offer to large borrowers; but the Direct Line rate of 6.9% appears to apply across all loan amounts, which means you can benefit from a rate that low even if you're only borrowing say £2000. If you're borrowing to part-fund buying a car and paying the rest of the money yourself from savings, it's nice to know you won't be penalised for your prudence with a high interest rate.
If you're shopping around, look for benefits rather than a better rate: do you get an insurance or breakdown cover deal- or is a loan right for you in the first place; check out perhaps hire purchase or a personal contract scheme.