With the release of the new 08 registration
upon us, many car
buyers will use dealer finance to
fund their new purchase.
According to price comparison
website uSwitch.com consumers will buy an estimated 224,000
cars using dealer
finance but
actually waste £1,094 on interest payments . The total
amount of extra money
spent will amount to an estimated £174m on dealer finance. A
cheaper alternative would be a low-rate personal loan .
According to the company on average car dealer
finance costs 9.88 per cent APR which is 3 per cent more than
competitive unsecured loan
deals.
Mike Naylor, personal finance
at uSwitch.com said, Finding a competitive loan and having the money
ready to buy the car immediately will not only ensure that people
get cheaper
finance but it also gives them more bargaining power to get the
best purchase price.
Just because a car dealer can offer you a good deal on a new
car, it doesn’t always mean that they will offer the best
deal to finance it.
However, Toby Clark, senior finance analyst at
Mintel, the consumer market research
company commented that cheap personal
loan rates could be out of most car buyer’s reach because
of late payments and defaults .
