What is a Comparison Rate?
As the owner of a car dealership, friends often ask me this question. The general feeling is that it’s some type of spin in a car ad. Actually it’s quite the opposite. Car advertising which involves the promotion of vehicle finance must, by law, include the comparison rate which relates to the particular finance deal being advertised.
The comparison rate does exactly as it suggests, it allows consumers to accurately compare the finance deal, by forcing the advertiser to include all components of the finance contract which may ultimately effect what the consumer pays over the life of the loan. For example, this prevents promotion of a very low interest rate to make an offer look attractive, but then stacking the loan with fees and charges which push up the payment to the consumer and the income to the financier.
A Comparison rate takes into consideration the loan term, the interest rate, payment frequency as well as upfront and ongoing fees, to arrive at a percentage rate which a consumer can compare easily to other finance offers, i.e. they are all calculated the same way. For the purposes of arriving at the Comparison Rate, the calculation assumes the loan amount will be $30,000 for all loans, so that all Comparison rates are calculated equally.
Legal guidelines published by regulators suggest that where a car is being advertised with a finance component, the ad should include the drive away price of the car and the comparison rate. These elements should be easily visible and obvious to a private consumer viewing the advert.
The fine print of the ad must contain other important elements such as the breakdown of fees and charges in the finance contract, the term of the offer and other important details calculated into the finance contract such as the deposit amount, if any, and the term of the loan.
Why does my oil turn black just after a service of my diesel?
So your car has been in for a scheduled service and running beautifully after the exercise. A week later while you are washing the car, you pop the hood, and causally have a little look around, just to make sure mind you, that your mechanic has actually done what he said he had.
After all, looking under the hood or kicking a tyre is almost part of our DNA now. Along with being deeply suspicious of your mechanic.
Now, even a decade ago you could really have a nose around – checking the filters and spark plugs, peering into the alternator and pushing and prodding whatever else you could get your fingers into.
Modern vehicles, however, offer limited access to this playground.
But the dipstick is still reachable, so oil check it is.
You juggle the stick around, pull it out and peer at it intently, hoping to impress any on-lookers with your mechanical prowess.
The oil level is perfect, but hey, it doesn’t look as clean as you think it should be.
Now before you bang the hood shut and storm off to accuse your mechanic of every indiscretion under the sun, hold on to your horsepower for just a second.
If your car is a diesel, black oil, even this soon after a service is perfectly normal.
The oil in your engine is there for three main reasons – to lubricate the moving metal parts reducing friction, to help in cooling by transferring the heat from the metal components to the sump and to clean the engine of the carbon deposits that can hinder performance.
It is the latter that is behind your oil turning black.
Diesel combustion engines produce much more soot (partially burnt fuel) and sludge as part of their normal operation than their petrol counterparts.
The modern trend for direct engine systems compounds the problem because while the higher fuel injection pressures in newer diesel engines produce lower exhaust emissions, it increases the production of soot.
The soot forms in cooler parts of the combustion chamber until it impinges on the cylinder wall and is scraped into the oil sump courtesy of the pistons leading to a faster blackening of the oil.
The particles are so tiny that they are able to escape the oil filter irrespective of how new or good the filter is.
Every vehicle, provided it has been run in, has some carbon build-up in the engine with the amount increasing with the number of kilometres on the clock.
So when your mechanic changes the oil in your car, the golden amber liquid is quickly darkened by the residual oil and carbon build-up in the engine. The high soot production, part of the everyday running of the car, takes care of the rest and within a few days that lovely new oil can look rather dirty.
That change in colour is a sign that the oil is actually doing its job.