Personal loans an option for new cars, expert claims

Thu, 24 Aug 2006

UK motorists should not be "lulled into the trap" of forecourt finance when looking to buy a new car and should look to personal loans, an expert claims.

The competition in the personal loans market is making lower rates available to borrowers, states Lisa Taylor, an analyst at Moneyfacts.

Rates of around six per cent are available for personal loans, which could be the best option for financing a new car.

However, Ms Taylor warns that around 80 per cent of personal loans may not have the advertised rate, so customers should shop around to find the best deal.

"With around 60 unsecured loan providers on Moneyfacts, it is worth spending a bit of time to secure the best deal to finance your new car," Ms Taylor remarks.

"After all you’re happy to spend ages finding the right car, why not apply similar logic to your search for vehicle finance?"

Recently, finance expert Nick White of uSwitch warned that more than half a million UK borrowers could be paying too much interest on their personal loan by not shopping around.


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