Lowest rate for AA loans

At a time when used car sales peak, the AA has dropped the interest rate on its personal loans to an extremely competitive 3.0% APR typical (down from 3.3%).

And exclusively for personal AA Members, the rate will drop even further to 2.9% APR typical from 27th September.

The rate change comes as used cars flood forecourts following the September registration change, when for every new car sold more than three used cars change hands.

According to AA research more than a fifth (22%) of buyers will use some form of finance to buy their next car.

David Searle, director of AA Financial Services says: “There’s a baffling range of finance deals available particularly from car dealers.  These include leasing and personal contract plans which can also be applied to used cars.  But they come with a range of conditions, for example mileage limits and penalties if there is even minor damage to the vehicle at the end of the agreement. 

“And, when the term ends you may either have to pay a ‘balloon’ payment if you want to keep ‘your’ car or simply give it back.

“While these arrangements may suit some buyers, a personal loan puts you in in control as a cash buyer – giving you the freedom to do a deal without any strings attached.  And you can buy your next car from anywhere.”

David Searle added: “As part of the AA’s strategy to expand the benefits of membership, the exclusive 2.9% member-only rate is among the lowest personal loan rates on the market and the lowest ever offered by the AA.”

AA personal loans can be used for any purpose – not just cars – and the new rates apply for loans of between £7,500 to £25,000 over one to five years, although loans for greater or smaller amounts are available at higher interest rates and for up to seven years.  Applying online is straightforward and an easy-to-use calculator illustrates the monthly payments and total cost of the loan.

In addition, AA loans can be paid off early without penalty.