I get two wrong questions with every call. The problem is the questions don't help the fire department as much as it seems and they actually can cost thousands of dollars.
Wrong question #1 - What's the interest rate?
Now, interest rate is important but you've been misled about using it to compare finance offers.
Here's why this question doesn't help as much as it seems
First, interest rate is not cost of financing. The cost of financing is how much you pay in dollars. Interest rate does play a part in how much you pay but it is not the only part. In fact, there are 6 other factors that influence your cost.
That's why you've been misled. The finance world wants you to focus on rate instead of what they charge you. It's a magician trick of keeping you focused on the wrong thing. Then, the finance world can do little things to make you pay more while thinking you've got the best deal because you have the lowest "rate".
Second, interest rate is not a hard and fast fact. Even though it feels like it is. In fact, rate can be calculated 6 different ways - all legally. And certain factors that raise your cost aren't included in rate.
If you focus on rate, you miss the chance to set up an apple to apple comparison of offers and to save money. Next week, we'll explain what information to ask.
John R. Hill