High Price Of Forecourt Finance

Consumers should stay away from costly forecourt finance when buying a new car, according to a price comparison website.

Moneysupermarket.com claims that £2.9 billion is wasted by new car buyers opting for dealer finance over a low-rate personal loan.

For example, a driver opting for a new Vauxhall Astra Club costing £14,625 via a finance deal at 11.6 per cent would repay £15,510.96 over three years.

However, buying the same car with a personal loan at 5.6 per cent would meant the new car owner would repay £14,308.56 – a saving of £1,202.40.

"Taking out a low-rate personal loan instead means [consumers] can avoid paying over-the-odds," suggests Stuart Glendinning, managing director at moneysupermarket.com.

"Many car buyers will spend a lot of time researching the price to pay for a car, to make sure they get a good deal. They need to make sure they avoid the sucker-punch of taking an uncompetitive loan and need to be aware of the best loan deals also."

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