Britons failing to shop around for car finance

06 June 2003
Britons failing to shop around for car finance

Three in five people (60 per cent) claim that price is very important to them when they are deciding whether to buy a new car.

However, Britons fail to shop around when it comes to financing cars, according to research from Abbey National loans.

On average, people spend more than two and a half weeks shopping around for the best price on a new car. However, nearly half (47 per cent) said they would spend less than 30 minutes looking at the different finance options available to purchase the car.

About four in ten people say they would consider buying a car abroad (41 per cent) or online (38 per cent) in order to save money, while a third (33 per cent) say they would go to an auction and nearly half (45 per cent) would scan the small ads.

More than three quarters of respondents to the survey (77 per cent) would haggle with a dealer to try to get free extra features such as air conditioning or electric windows.

However, three fifths of people (60 per cent) of those surveyed admitted that they did not shop around for the best loan deal the last time they bought a car.

One in five people (20 people) said they would get a hire purchase deal or similar from a showroom, but the Abbey National warns that, in many cases, they would pay hundreds of pounds more interest than they would pay on a low cost unsecured personal loan.

Gary Hockey-Morley, Director of Product Strategy, Abbey National, explained, 'As a nation, we seem to be determined to get a good deal when buying a new car and many of us are prepared to go to great lengths to secure a bargain.

'However, this is a waste of time if the finance option they choose doesn't represent good value. What you save on negotiating a free sun roof, you waste on expensive financing.'

'There are some great rates available on unsecured personal loans and yet many people are content to sign a finance deal in the showroom without shopping around, despite the fact that they could save hundreds of pounds by going elsewhere for their credit, ' Mr Hockey-Morley concluded.