The AA says that car buyers waste millions each month because they simply fail to shop around when purchasing a car.
Currently, three-quarters of car buyers go no further than their bank (51 per cent) or the car dealer (27 per cent) to arrange funding for a car.
"These are some of the most costly places to arrange car finance," Lloyd East, director of AA Personal Finance, warned.
"Nearly two-thirds of all car buyers (63 per cent) take up to a month shopping around for their ideal motor, yet half of those using finance take less than a week to research and arrange it."
It is estimated that motorists waste a total of up to £1.3 billion.
Mr East concluded by saying: "Other deals, particularly those offered at point of sale such as hire purchase, can sting you for even more."
© DeHavilland Information Services plc