Wrong loan choice leads to 'cost increase'

Choosing the wrong finance option when buying your new car could increase the amount you pay for a new set of wheels by as much as 26 per cent a new study reveals.

A report from a UK finance site states that drivers could end up paying significantly more for their new car if they fail to research their finance options properly - and those who are tempted by the convenience of a forecourt loan could be particularly badly hit.

"With just over a week to go before the new 57 plates will be hitting our roads, many motorists will be searching garages up and down the country for their new cars. However, I suspect much less time is invested in searching for the best finance deal. Get your finance choice wrong and it can prove a costly mistake," Samantha Owens, head of personal finance at Moneyfacts, said.

"Before opting for the convenience of forecourt finance, it's worth checking out how this compares with other deals on the market. There are over 50 providers offering a range of unsecured loans and plenty of options available to borrowers. But with such a wide range of choice, comes a wide range of rates and deal types."

The finance site's research revealed that, for consumers taking out a £10,000 loan, the difference between the best and worst deal was around £2,600 - or 26 per cent.

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