Getting a personal loan for car finance purposes can be the simplest way of affording a new car . However, before taking out a loan, you should be sure about the rate you actually get. Furthermore, when shopping around for a loan, make sure you aren’t damaging your credit rating.

According to some experts, most people who apply for unsecured loans don’t get the rates advertised. ‘Typical’ rates don’t always mean the rate you actually get, so be aware that the rate advertised isn’t necessarily what you will pay. Of those who apply, only about on quarter receive the typical rate, it all depends on your credit history .

Lenders and banks generally price according to the credit risk that you represent. Furthermore, when you apply for credit the search made is held with credit reference agencies . Over time this can result in a credit ‘footprint’, meaning the best rates are harder to get.

The news raises a host of questions over Office of Fair Trading legislation and individual lender behaviour. Some lenders now operate individual rates. Consumer group Which? recently spoke out about this trend, saying: Personal pricing exacerbates the problem. It means banks don't even have to meet the two-thirds rule. We are concerned about this trend. So when shopping around hurts your credit score and many lenders don’t offer advertised rates, something in the personal loans market has got to give.