Big savings missed on car finance

Car buyers could save over 1,500 by shopping around for a loan - something 69 per cent of consumers currently do not do.

09:38 25 August 2004

Car buyers could save over 1,500 by shopping around for a loan - something 69 per cent of consumers currently do not do.

That is according to a new survey commissioned by Alliance & Leicester.

One person in five choose to finance their car with the option offered by the car dealer, the survey found.

Over half (57 per cent) believe that the car dealer schemes are in fact the most competitive.

The head of personal loans at Alliance & Leicester, Andy Bayes, commented: "I would urge anyone considering buying a car this autumn to shop around for their car finance and base their decision on the rate being offered to them and not just on the freebies or discounts being offered in return for dealer finance."

Of those who chose to finance their new car through the car dealership finance scheme, a third (33 per cent) chose this route as it meant they got a discount on their car and 22 per cent because it meant that they got freebies with the car.

Mr Bayes added: "If you choose to use a personal loan, arrange it to suit your budget before you start to look around. The fact that you have the loan arranged means your finance is already sorted and you can concentrate on getting the best price."

In conclusion he pointed out: "If you drive a hard bargain and get the car you want cheaper than the loan you have arranged, you can simply reduce the amount you want to borrow."