Car buyers are more likely to choose a finance package in the showroom over a personal loan to pay for their new car, despite the hype from online banks and high street providers.

Some 88% of people will have decided how to fund their new vehicle before leaving home, according to the research from GMAC – one of the world’s largest automotive financing companies which provides the finance for people buying new cars through the UK’s network of Vauxhall, Saab and Chevrolet retailers.

For this group, withdrawing cash from a savings account is the most popular way of paying for a car, cited by 53% of all those polled.

This is followed by nearly one in four (24%) who would be most likely to opt for a finance package from the retailer, compared with 15% who would choose a personal loan from a high street bank. Even fewer (7%) would look to borrow money from an online loan provider.

When asked what would most influence a decision to take out showroom finance, more than a third of all respondents (34%) said that their personal experience in the showroom – for example the attitude and expertise of the finance advisers – would be the single most important factor.

This was cited ahead of any research they may have undertaken into the different finance options available (22%), while a further 15% said that benefits such as an extended service and maintenance options would be most important.

Ed Paulat, GMAC’s UK managing director, said: “The results of this survey expose the myth that car buyers consider retailer finance to be complex, expensive and out-of-touch with their needs. Although it might be difficult for the direct loan providers to accept, the truth is that retailer finance is extremely convenient and flexible.

“What’s more, it can compete with the very best personal loan rates available, which are often only accessible to those people with the very best credit records.”

For example, 0% APR is available on a number of different models across the Vauxhall range from many franchised retailers throughout the UK, with car buyers paying only the list price of the vehicle.

Paulat added that when taking out a finance package in a showroom, car buyers are protected by stringent standards and regulations.

“As the survey shows, good personal relationships are an extremely important part of the car buying process. People can buy with complete confidence at franchised retailers, whose finance advisers are trained to the same standards, and are required to comply with the same regulations, as staff in the high street banks,” he added.

Research findings were taken from the "Pulse of the Market" survey conducted by General Motors in the UK based on 1,044 motorists, during May and June 2007.

Flagship centre

Burrows revealed his expansion plans during a tour of HiQ Nottingham, which is the first company-owned centre to gain the new corporate identity.

The Nottingham workshop is a ‘Class A’ flagship for the brand and represents a £600,000 investment by HiQ, but its features are designed to be scaleable for ‘Class B’ and ‘Class C’ centres to ensure costs are kept reasonable for franchisees.

It has highly visible white-on-black branding, a totem listing consumer brand partners such as Bosch, Goodyear and Castrol, and large vinyl graphics of tyres, batteries and exhausts to depict clearly what it offers.

Inside, the reception area has low desks so all transactions are conducted while seated. A large menu pricing board overhead displays fixed charges for common parts and services, and the wall displays a prominent promise that no unnecessary work will be carried out on a customer’s vehicle.

The reception includes a large TV, Playstation2, free hot drinks machine and a fridge with free cold drinks. Computer stations allow business users to continue working while they wait, overlooking the workshop through a glass wall.