Almost a million second-hand car loans

Almost a million Britons are set to take out a second-hand car loan in the next six months, but could be paying too much.

New figures from Sainsbury's Bank show 5.5 million UK residents are planning to buy a second-hand car in the coming months, with one in six (931,600 people) taking out a car loan to fund their purchase.

However, while almost a million people are planning on taking out a car loan, they are planning to pay less for their new motor.

In the six months to the end of August Britons are planning to spend an average of £4,056 on buying a new car - considerably less than the £5,018 they were planning to spend on second-hand cars in the previous six months.

"Our findings show that people are anticipating spending less on their second-hand car purchase compared with six months ago, so it's important that they remember to haggle when negotiating any car purchase to secure the best deal," said Steven Baillie, Sainsbury's loans manager.

"Despite the fact that haggling can save the buyer hundreds or even thousands of pounds, many of us are reluctant to do this.

"Our findings reveal that over half of people who are intending to buy a second-hand car in the next six months state they do not plan to haggle or will only haggle slightly."

As well as haggling over price, Sainsbury's Bank points out Britons can save themselves more money still by shopping around for a car loan.

Interest rates on personal loans under £5,000 can be secured from anywhere from 5.9 per cent to more than 15 per cent, so shopping around can save you hundreds of pounds in interest payments.

And having the money in place before you buy means you are in a far stronger position to haggle for the best deal once you decide on the car you want.