Big difference in loans to finance car

Big difference in loans to finance car

The difference in cost between loans from rival companies taken out to finance a car could be as much as 26 per cent, new figures from one independent financial advisor show.

Moneyfacts.co.uk has advised those looking for a loan to fund the purchase of a car to shop around for the best price after it was found in some cases the difference between two deal runs into thousands of pounds.

On a £10,000 loan repayable over five years, Leeds Building Society offered a deal £2,652.60 cheaper than Britannia Building Society, with monthly repayments over £40 cheaper.

It was also advised that specialist car loan deals should be avoided, as freebies and perks don’t compensate financially for paying a higher interest rate.

"Before opting for the convenience of forecourt finance, it’s worth checking out how this compares with other deals on the market," warned Samantha Owens, Moneyfacts.co.uk head of personal finance.

"Get your finance choice wrong and it can prove a costly mistake," she added.