When you finance your purchase, are you offered insurance?
When we finance the purchase of a computer, a telephone or a car, we are usually offered insurance.
If you decide to take out this insurance, bear in mind that there will be a cost.
The regulations stipulate that institutions must report in the advertising of their banking products the real cost of financing, with all the additions included. Also, they must express this in terms of the annual percentage rate of charge (APR), by means of a representative example that includes all the costs of the transaction.
Consequently, when we are given the option of voluntarily arranging a product related to the financing, in this case insurance, advertisements may show us the example including the cost of this related product or not. Therefore, it is worth reading the text of the advertisement carefully to know to which option the APR corresponds.
But, in any case, whenever we are presented with advertising that includes an example of financing with insurance, thus adding its cost to the fee, the APR must factor this in.
Do the numbers with our simulator.