According to Alliance and Leicester (A&L;), almost half of all car purchasers (47 per cent) are throwing money away on poor rates through car dealership financing.

Nearly one in five (18 per cent) choose dealership-offered credit as a matter of course, many of which incur double digit interest rates.

With personal loans on the market currently running at best by rates of under six per cent, many buyers could be throwing away up to £1,400 by opting for the convenience of a dealership loan.

“You don’t have to be a rocket scientist to recognise that choosing finance from a car dealer with an astronomical interest rate could cost the earth,” said Claire Alvey, personal loans manager at Alliance and Leicester.

Ms Alvey urged customers not to be duped by “a silver-tongued salesman”, noting that shopping around for financing before making a purchase could help to avoid paying over the odds for borrowing money to purchase a new motor.

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