Advertised finance offers quote a rate that many applicants never receive. The arrangement is legitimate and disclosed, but it works differently from how most people read it.
What a representative rate means
Advertising rules in many markets require that a quoted rate be available to a defined proportion of those who take the product, commonly a majority rather than everyone.
The remainder can be offered a different rate based on their individual circumstances, and that rate may be considerably higher.
The figure is therefore a description of a typical outcome, not a price available on request.
How individual pricing is decided
Lenders score applications on credit history, existing borrowing, time at an address, employment stability and how the requested amount compares with income.
That score produces a risk band, and each band carries its own rate, so two applicants for the same car and amount can be quoted differently.
The size of the deposit matters as well, since a larger deposit reduces the lender's exposure if the vehicle has to be recovered and sold.
Why subsidised offers work differently
Very low rates on new cars are usually funded by the manufacturer rather than reflecting the lender's cost of money.
Because the manufacturer is paying for the reduction, these offers are restricted to particular models, particular terms and often a set deposit.
They also tend to appear on vehicles the manufacturer most wants to move, which is useful information about the car as well as the finance.
What the total cost reveals
The rate alone does not determine what an agreement costs, since term length, deposit, fees and any final payment all change the total.
A low rate over a long term can cost more overall than a higher rate over a shorter one, because interest accrues for longer.
The total amount payable is the figure that permits a genuine comparison, and it is disclosed on every regulated agreement.
Why checking eligibility matters
A formal application is recorded against a credit file, and several in a short period can be read by later lenders as a sign of difficulty.
Eligibility checks that do not leave that mark allow an applicant to establish their likely rate before committing.
Knowing the rate actually available also changes the negotiation, because a buyer who no longer needs the subsidised finance can pursue a discount on the car instead.