Drivers ‘Should Avoid Paying Over The Odds’
Motorists considering buying a new car in the next few weeks should be careful to make sure that they are not coming under unnecessary monetary pressure, it has been suggested.
According to moneysupermarket, as Britons across the country prepare to buy one of the new 08 registration vehicles from next month, there is often a lack of thought towards about how they will finance such a purchase. The price comparison website suggested that many prospective buyers will opt to fund getting a new car through a dealership payment package, which may unnecessarily place strain on consumers’ pockets in the long run. As a result, it was claimed that people could be wasting some 950 pounds each in needless interest payments.
It was also claimed that significant numbers of consumers will spend time contemplating whether or not they should splash out more cash on getting extras such as alloy wheels, cruise control or a DVD player. However, by taking the time to choose the most effective financial deal, motorists should be able to generate enough income to be able to afford such cosmetics.
Tim Moss, head of loans for moneysupermarket commented, said: “If 425,000 new cars are bought next month with forecourt finance rather than low-rate personal loans, Brits could be paying out an extra 402 million pounds in interest. It is vital to shop around for the best deal to finance your new car to help you avoid paying over the odds.”
And in taking out a low-rate personal loan ahead of a garage showroom finance package, it is possible that consumers will be able to purchase the vehicle of their dreams in a more cost-effective manner. Furthermore, it may also provide borrowers with extra financial assistance to meet other demands on their spending such as council tax payments, store and credit cards, utility bills and mortgage or rent costs.
Richard Mason, director of insurance at the price comparison website, added: “Receiving 12 months’ free cover is a great perk when buying a new car. But, one year on, you could find yourself paying a significantly inflated premium if you stick to the same provider, as the policy is unlikely to be very competitive.” Mr Mason went on to point out that the important thing that motorists should be aware of is that the car insurance sector is no longer dominated by a select band of companies. Citing recent research by the price comparison website, he claimed that 64 different policy providers have, at one point or another, all offered the most competitively-priced premium. As such, he stated that it is vital drivers make sure that get more than one insurance quote.
Research by the price comparison website also unveiled the financial benefits that getting not just any personal loan, but one that has a low rate of interest attached to it. Those consumers borrowing 12,600 pounds from Vauxhall repayable over a three-year period were revealed to be due to pay some 11.6 per cent in annual interest. As such some 14,857 pounds 20 pence would be paid back to the firm. However, in selecting a best-buy loan worth the same amount from Moneyback Bank which charges interest of 6.7 per cent, borrowers could be more than 900 pounds better off as their total repayments would stand at 13,910 pounds 76 pence.
As such taking out a low-rate loan ahead of a showroom finance deal could be a recommendable option for those wanting an effective way to buy a new car. Last year, Sue Robinson, director of the Retail Motor Industry Federation’s National Franchised Dealers Association, claimed that those on the lookout for a new automobile should be conscious that the expense of getting a vehicle is “high”. She also advised motorists to consider how they will finance a purchase before arriving at the showroom and to take any car that they want to buy out for a test drive.
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