Quick answer: The comparison rate combines the rate with most standard fees using a standard scenario. It helps screen loans, but your actual cheapest deal still depends on your real amount, term, fees, balloon and vehicle price.
Questions borrowers commonly ask
- If the headline rate is 1.88% but there are nearly $3,000 of fees, what am I really paying?
- Does the comparison rate include the balloon and every fee?
- Why was the finance person's repayment different from the salesman's number?
Comparison rate is not your exact personal effective rate
It is a standardised comparison measure. Your actual loan can have a different amount, term and balloon.
Do the dollar comparison
Add the financed fees, scheduled repayments and balloon, then compare against the same vehicle price elsewhere.
Do not ignore the vehicle deal
A low-rate campaign can still be worse if it requires a higher car price or forfeiting a rebate.
General information only. Approval, pricing, fees, income treatment and vehicle eligibility depend on the lender, borrower circumstances and contract.
Frequently asked questions
Is comparison rate the rate charged to my balance?
No.
Does it include every fee?
Not necessarily every contingent or transaction-specific cost.
Does it fully capture a balloon?
You still need the actual repayment and final-payment comparison.
Can a 1.88% deal still be expensive?
Yes, if fees are large, though it may still be competitive.
What is the best final comparison?
Actual dollars paid for the same vehicle and term.
Sources and verification
Related GPS Finance resources
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