Auto Trader is advising customers to bring their new car purchases forward in order to save hundreds of pounds ahead of the VAT rise next year.

Auto Trader has launched a VAT hub on its website to provide advice to consumers about how to find the best deals before the VAT rise to 20% in January.

For example, a new car may cost around £15,000 now but after January 4 there will be nearly £400 extra to pay. In recent research from Auto Trader, one quarter of consumers recognised this and plan to bring multiple large purchases forward before the New Year.

The poll was conducted by Red Shift on behalf of Auto Trader. 1,500 responses were collected in September 2010.

The Retail Motor Industry (RMI) backed Auto Trader’s advice.

Sue Robinson, RMI director, said: “The next few weeks prior to the VAT rate are an ideal time for consumers to purchase a car.

"Not only will consumers save the 2.5% VAT increase but there are some incredible offers available on dealer forecourts.”