Dealer finance costs £3,000 too much
Choosing to use dealer finance instead of arranging your own loan when buying a car can see motorists spend more than £3,000 too much.
With the new "56" number plates out in a couple of weeks, independent comparison site uSwitch.com is advising drivers they can save a packet by dodging dealer finance and taking out their own loan instead.
"I can't deny that looking for a new car is far more exciting than searching for the best finance package," said Nick White, head of personal finance at uSwitch.
"Dull as this part of the process may seem, a rushed decision or just taking the finance deal offered by the car dealer could turn out to be a long term financial burden."
Currently, the average interest rate charged for people taking finance packages from showrooms is 11.3 per cent APR, which is more than twice as much as some of the cheaper personal loans available elsewhere, uSwitch points out.
The average saving available by moving to a cheap personal loan provider is £1,171, but figures from uSwitch show that someone buying Ford Focus 1.6 TDCi could save £3,126.49 by using an independent.
And with more than 179,000 new cars set to be purchased on dealer finance programmes in September alone, Britain's drivers could save themselves as much as £210 million with a little preparation.
"Paying too much for car finance is really easy to avoid. By organising the loan before visiting the car showroom, people will not feel pressurised to get the cash quickly to secure the car of their dreams," Mr White said.
"Some of the most competitive loan deals can be found on the internet, so it's really important to check out all the options available."
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- cheap loan uk ,
- loans ,
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