Dealer's car finance plans 'not competitive'
Published On 16 August 2007
The unveiling of the new '57' vehicle registration on September 1st will prompt UK consumers to 'waste' £175 million on uncompetitive car finance deals, a consumer group has said.Website uSwitch.com has reported that over 400,000 new cars were sold in September 2006 - representing almost 20 per cent of all new car sales in the year. A similar number of new cars will most likely be sold this year and just under half will use dealership car finance deals to fund the purchase.
However, opting for a dealership's car finance deal could prove expensive, the website has warned. In fact, car buyers could each waste £985 on unnecessarily high interest payments if they fail to shop around for the best deal.
"Finance deals offered by car dealerships can be expensive, and unwitting motorists could end up paying as much as £1,131 extra for their dream car," explained Mike Naylor, a personal finance expert at the website.
"Just because a car dealer can offer you the best deal on a new car, it doesn't mean that they will offer you the best deal to finance it."
Mr Naylor added that if was often cheaper to opt for a personal loan from a bank as the interest rates on these are usually less than those on dealerships' car finance packages.
Figures from the AA show that the typical cost of fully comprehensive car insurance in the UK rose to £822 in the second quarter of the year.
