New car finance and Insurance – why getting it wrong could cost you thousands more
Michelle Slade, analyst at Monyfacts.co.uk comments:
“Motorists everywhere are now searching garages all across the country to find the best deal for the new 08 plate cars. Unfortunately the same effort is rarely put into sorting out the best finance for the car and getting this wrong can be an extremely costly mistake.
“It may seem easier to opt for the forecourt finance that’s offered at the garage, but checking out what’s on offer on the rest of the market could see you making significant savings.
“Latest Moneyfacts.co.uk research shows that on a £15K loan the difference between the best and worst loan is nearly £3K. This increases further to a staggering £7.2K if you take payment protection insurance with the loan.
£15K over 5 years
Without Insurance |
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|
Provider |
Monthly Repayments |
Total Cost |
Cheapest |
Moneyback Bank |
£293.78 |
£17,626.80 |
Most expensive |
Ocean Money |
£341.73 |
£20,503.80 |
Difference |
|
£47.97 |
£2,877.00 |
With Insurance |
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|
Provider |
Monthly Repayments |
Total Cost |
Cheapest with PPI from Paymentcare |
Moneyback Bank |
£309.94 |
£18,596.40 |
Cheapest from one provider |
Barclaycard |
£340.14 |
£20,408.40 |
Most expensive |
Northern Rock |
£430.43 |
£25,825.80 |
Maximum Difference |
|
£120.49 |
£7,229.40 |
Source: Moneyfacts.co.uk 19.2.08 |
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What else should you take into consideration?
“When shopping around, make sure that you compare the total repayments, particularly when opting for provider’s insurance. Payment protection does not have to be taken out with a loan. Independent providers such as Paymentcare or British Insurance offer a more flexible product at a fraction of the cost.
“Remember that the majority of the market offers typical or personal pricing. Don’t assume you will get the rate advertised; the rate you will receive will depend on your credit record.
“Don’t be swayed by incentive gimmicks such as free breakdown cover. Usually these loans are much less competitive and the saving you make will more than pay for separate cover elsewhere.
How else can you save money?
“It’s not just on the finance where you can save money. Once you have selected and paid for your new car, you will need to get it insured.
“Car insurance providers target certain types of customers. If you were to phone around for quotes, not only would you be wasting a large amount of time, you might not necessarily call the provider that could offer you the best deal.
“Help is at hand – Moneyfacts.co.uk compares over 90% of the car insurance market. By just entering your details once you can find the cheapest deal for you in only a few minutes. Our latest research shows you could save a further £732 just by opting for the cheapest deal.
|
Male 22yrs old |
Female 30 years old |
Male 50 yrs old |
Best price |
£595.00 |
£315.67 |
£235.04 |
Worst price |
£1,327.00 |
£1,000.00 |
£728.00 |
Difference |
£732.00 |
£684.33 |
£492.96 |
Figures based on a new Ford Focus Ghia, driver having full clean licence, no convictions taken out in NR1 postcode |
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Source: Moneyfacts.co.uk 19.2.08 |
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“Doing the research into the finances for that new car before you visit the forecourt will help you make an informed choice and with the savings you have made, you could afford to pay for some of those optional extras.”
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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