Car Buyers Losing Millions

Car buyers in the UK who are afraid to haggle when purchasing a new auto could be losing out on millions of pounds collectively.

Research from Sainsbury’s Bank states that car buyers can save more than £1,500 when buying a new car if they negotiate on the price, but many motorists are unprepared to do so.

Steven Baillie, loans manager, said: “Once you have decided which new car you want, you then need to be prepared to haggle over the price you pay.”

He added that buyers using a personal loan to buy their vehicle should shop around to make sure they receive the best deal, while the company notes that 16 per cent of the cost of new cars is funded by personal loans.

Financial services comparison firm Moneyfacts reported that the personal loans market in the UK is competitive, with consumers able to barter for lower interest rates on offer.

Now that unsecured loans are so expensive, and can still put the borrower’s house at risk, many consumers are considering using a low cost secured loan.

UK motorists will waste £228 million on finance deals offered by car showrooms, according USwitch. In 2006, 2.3 million cars were sold.

Research shows that consumers who choose an ‘over priced credit deal’ from a car showroom instead of a personal loan will pay an additional £1,200 in interest payments.

Borrowing a loan of £9,995 with a 10.3 per cent APR, results in interest payments of £2,698 over five years. However, a personal loan at 5.9 per cent APR will save the car owner £1,160.

Source:
http://www.1stopfinanceshopuk.biz/blog/2007/05/22/car-buyers-losing-millions/