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Motorists urged not to waste money on costly credit

Drivers are being urged to beware expensive forecourt finance deals when buying a new car this year.

Although there are a number of cheap personal loans available on the market, motorists are set to waste £228 million – £1,200 each – on over-priced credit from car dealerships, according to uSwitch.

Research by the price comparison site has shown that the average car showroom finance deal charges 10.12 per cent APR, which is 4.22 per cent higher than many market-leading loans.

Nick White, director of financial services, said: "A rushed decision or just taking the finance deal offered by the car dealer could turn out to be a long term financial burden.

"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."

Last October, a study by Sainsbury's Bank revealed that the number of drivers planning to buy a new car had been rising, with people more willing to take out larger loans that they were in the previous year.

Click here to see how much you could borrow when you apply for a loan with Lombard Direct.

12/02/2007 16:14:35

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