Approximately one in five people who arrange their car finance transactions during the run up to Christmas and the start of the new year will choose a personal loan, according to Sainsbury’s Bank . The bank found that of the 5.16 million British people looking to purchase a new car before February, 17 per cent will choose loans for finance .

The period is forecast to be a busy time for car dealers, with an anticipated £26 billion worth of deals expected. Consumers are also wising up to shopping around for their finance, and not simply choosing the first loan that comes their way.

Steven Baillie, an expert from Sainsbury’s bank, urges consumers not to pay over the odds for their vehicle . He said: Knowing the market value of a vehicle will help to ensure owners get a fair price for it when they come to sell or get the best deal with buying a new one.

Mr. Baillie also highlighted the possibility of haggling a good deal, concluding: Unfortunately many of us are reticent to do this. Indeed, 50 per cent of people that are planning to buy a second-hand car in the next six months say that they do not plan to haggle or will only haggle slightly.