A estimated two million Brits regret jumping straight into the first car finance deal offered when buying their car, without shopping around first, according to a new report by AA Cars, the AA’s used car website.
The research, which was conducted through an AA-Populus poll of over 16,000 drivers also found that less than a fifth of drivers using car finance (18%) to buy their vehicle actually compared offers to make sure the deal they were selecting was the best one available to them
Twelve percent admitted that they simply couldn’t be bothered or didn’t have the time to shop around and so could have easily missed out on a more suitable finance option.
Nevertheless, most drivers (60% overall) agreed that they are happy with the finance they have chosen. But, there is a satisfaction age split: nearly three quarters of over 65’s (72%) are happy with their car finance deal, compared to less than half (47%) of 18-24’s – possibly reflecting the greater experience of, and wider range of options for, older drivers.
James Fairclough, CEO of AA Cars says: “With complex jargon and a wide range of financial products and rates available through car dealers, banks, manufacturers and other providers, it is no surprise that car finance is baffling for many to understand.
“Although it is good to hear that 6 out of 10 people are happy with their deals, many of them could be paying a lot less if they had shopped around first. My advice would be to take some time to compare the options available both online and at your dealer before making any commitment. There some very competitive finance deals available in the market and small rate differences can add up to thousands of pounds over a number of years.
“Our research suggests that perhaps up to two million Brits have opted for the first offer available in order to secure the car they really want and may not know if they have got the best deal. It’s really important to take time to consider what’s available – and not let your heart rule your head so that you end up making an impulse decision you might later regret.
“An increasing number of providers, including the AA, also offer a quick credit checking service that will give you a good indication of how likely it will be that you will be offered finance, but without leaving a ‘footprint’ on your credit record.
“Whatever finance option you choose, you should always make sure you fully understand what you are getting yourself into before signing on the dotted line – and don’t just take the first deal that comes along without looking at other options. You should also read the small print, to understand all the terms. For example, if you think you might want to pay off a loan early, you should check that this won’t trigger an early payment penalty.
If in doubt, seek advice from people with expert knowledge. We – the AA – understand the Car Finance** market and can help both customers and dealers make the car selling and buying experience straightforward and pleasurable for everyone.”