Personal loans cheaper than dealership finance, expert claims

Fri, 15 Aug 2008

People planning on buying a new '58' registration car should shop around for a personal loan before they do so, according to one expert.

Simeon Linstead, head of personal finance at uSwitch.com, explained that people who opt for dealer finance could end up spending £826 a year more than people who go for a low-rate personal loan .

He said: "Consumers should search for a competitive deal with best buy unsecured personal loans starting from just 7.4 per cent typical APR, 2.77 per cent lower than the average car dealer finance at 10.17 per cent typical APR."

Getting a personal loan before buying a car means that people could find that their bargaining power is increased as they already have the cash available, he added.

However, some car dealers offer zero per cent deals and these are worth considering, Mr Linstead stated.

Yesterday, Mark Boyle, personal loans manager at Alliance and Leicester, suggested people who have built up debt on store cards take out a consolidation loan to pay it off as doing so could save them money .
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