The survey indicated that only 17% of people who have bought a new, or nearly new, car in the last five years obtained two or more finance quotes. 20% of car buyers chose dealer finance, with 78% of them admitting it was because it was the easiest option.
57% believed the dealer finance to be the most competitive, whereas the Alliance & Leicester, unsurprisingly, claims “these deals are often highly uncompetitive, charging interest at more than double that offered by many personal loan providers.”
The AA recently claimed that car buyers were wasting up to £1,000 by not shopping for competitive rates – its own being 6.3%. The Alliance & Leicester suggests a consumer buying a typical sports saloon priced at £21,525 could pay £1,245 more by purchasing through a typical car dealer finance scheme at 11.1% (a rate derived from manufacturer web sites), rather than getting a personal loan from Alliance & Leicester at 6.9% APR. The A&L admitted that other rates may be available at dealers operating special promotions.
Of the 20% of people who chose to finance their new car through dealers, 33% chose this route as it meant they got a discount on their car, and 22% because it meant that they got some 'freebies' with the car.