Car Loans Costing Dear

Brits are splashing out billions of pounds on car loans but many are failing to shop around to get the best deal, new research claims.

Over a third of motorists who have taken out a loan signed up with the first company to offer them a quote whilst a further 13 per cent looked in only two places, according to a survey by Sainsbury's Bank.

Sainsbury's research reveals that over a quarter of new car buyers will turn to a car loan to finance part or all of the cost of it.

Almost half of these said the loan would cover between half and a quarter of the cost of their new vehicle whilst a further one in five said they planned to cover between three-quarters and the whole cost of the car.

But with motorists spending a total of £9.4 billion on car finance, Sainsbury's says 50 per cent of people could be paying over the odds.

Steven Baillie, loans manager at Sainsbury’s Bank, said: "Loans can be a useful way to spread the cost of a major purchase like a car, but millions of people could still be throwing money away by not comparing interest rates when taking out a loan."

"With so many providers now offering quotes online, it can be really quick to shop around for a good deal. By shopping around, you could reduce the APR on your loan by up to 38 per cent and save over £1,000 in repayments."