New car shopping – don’t forget your finance options

Lisa Taylor, analyst at moneyfacts.co.uk comments:

“As the first of September draws near, keen motorists will be spending the next couple of weeks shopping for their shiny new car, bearing the ‘56’ registration. Many will have been searching garages up and down the country to find the most competitive deal, feeling pleased with themselves in obtaining the added ‘freebies’ of car mats, mud flaps and a tank of petrol. But they should not be lulled into the trap of buying ‘forecourt’ finance without first shopping around. It can be a very costly mistake!

“The market for personal loan business is incredibly competitive, allowing consumers to reap the benefits by means of lower rates. Today, rates of 6% or less are easily found, that’s just 1.25% over the current base rate, and fixed for the duration of the loan.

“With around 60 unsecured loan providers on moneyfacts.co.uk, it is worth spending a bit of time to secure the best deal to finance your new car. After all you’re happy to spend ages finding the right car, why not apply similar logic to your search for vehicle finance. Take for example a 5-year loan of £10K, at 6% the total interest payable would be £1555.40, compared to £2621.60 at 10%, a potential saving of £1066.20. So with a little time spent to secure the best finance deal, you could have paid for the extra upgrades such as a climate pack or spoiler.

“But two words of warning. Firstly around 80% of loans use typical pricing, so bear in mind that the rate which is advertised, may not be the actual rate you pay, this will be determined by your credit rating.

“Secondly, should you choose to take optional payment protection, the costs will vary significantly between lenders. Previous Moneyfacts research has shown, that premium and associated interest on a £5K loan over 3 years can vary by up to £800. Sourcing this cover from independent companies such as British Insurance and Paymentcare can see the costs lowered to around £300, a staggering £1000 less than the most expensive loan provider’s policy.”

Visit our new website www.moneyfacts.co.uk, the only truly independent and impartial whole of market price comparison site, for up to the minute best buys and much more.

Loans - £10K Over 5Yrs - With Insurance

a = APR dependent on credit rating.   b = Minimum age restrictions may apply.   B = Reduced rates available for internet applications.  
 
 Loans - £10K Over 5Yrs - Without Insurance

A = 2 years' discounted Direct Line motor insurance plus 2 years' free motor breakdown cover available.   a = APR dependent on credit rating.   b = Minimum age restrictions may apply.   B = Reduced rates available for internet applications.   c = If PPI taken, moneyback paid annually (dependent on loan amount) on loan anniversary as follows. £1K to £5K - £10, £5001 to £10K - £20, £10,001 to £15K - £30, £15,001 to £20K - £40 & £20,001 to £25K - £50. Paid only if PPI not claimed upon or cancelled.  
 Figures correct at 23.8.06
Source: www.moneyfacts.co.uk        

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £349