Product category:
General insurance
News Release from: Moneysupermarket.com | Subject: Insurance
Edited by the Insidemoneytalk Editorial
Team on 22 August 2007
Slam the brakes on showroom finance
Brits buying a new 57 car next month could waste £140 million in interest Beware expensive renewals on motor insurance
The 405,000 Brits buying a new car next month could waste a collective £140 million in excess interest payments if they don't choose the cheapest way to finance a new car.1 Deciding what car to buy can be tricky, but determining how to finance the purchase can be a bigger minefield Research from price comparison website moneysupermarket.com shows driving off with forecourt finance rather than a low-rate loan could cost British motorists an extra £140 million
This article was originally published on Insidemoneytalk on 29 Mar 2007 at 8.00am (UK)
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A new car buyer spending an average £14,000 and taking a typical manufacturer's finance deal at 7.9 per cent APR would repay a total of £15,707 over three years.
However, buying the car with a loan at 6.3 per cent APR means they will repay £15,361.2 Tim Moss, head of loans at moneysupermarket.com, said: "New car buyers need to do the sums before taking out car finance or risk being taken for a ride.
Taking out a low-rate personal loan will help them avoid paying over the odds." moneysupermarket.com also urges drivers who bought a new car last September to carefully review their motor insurance renewal.
Richard Mason, director of insurance at moneysupermarket.com, said: "Many new car buyers received 12 months' free cover last year, which was a great perk.
But one year on, you're likely to find yourself paying a hugely inflated premium, because the renewal is unlikely to be competitive.
"Many insurers will operate at a loss over the first year of an insurance policy, and look to make up the profit on expensive renewals.
By comparing insurance premiums now, you can save a great deal of money.".
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