More UK motorists than ever before are turning to car finance to fund their vehicle purchases. The market for affordable car finance options has grown significantly over recent years, including options for bad credit finance applicants and subprime borrowers.
Unfortunately, evidence suggests that the vast majority of car finance customers are driving away with a bum deal. In fact, research from the AA has shown that less than one in five drivers make the effort to shop around for the best possible deal.
Most simply choose the first car finance lenders they come across, oblivious to the fact that they could potentially save a fortune elsewhere.
Specifically, the report from the AA concluded that just 18% of motorists applying for car finance shop around to find the best possible deal. Worse still, around 12% stated that they cannot be bothered comparing the market to find a good deal, despite acknowledging the fact that a better deal may be available elsewhere.
Speaking on behalf of the AA, James Fairclough pinned at least part of the blame on the lenders themselves.
“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,” he said.
“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.”
Most Car Finance Customers Happy
On a slightly more reassuring note, the AA study also found that approximately 60% of car finance customers in the UK are satisfied with the deals they’ve taken out. Nevertheless, there’s a rather glaring discrepancy between the age groups studied and their satisfaction respectively. Around 72% of car finance customers over 65 said they were happy with their deals, plummeting to just 47% for 18 to 24-year olds.
However, the study did not go into any specific detail as for the reasons for the respondents’ satisfaction or dissatisfaction accordingly. Instead, the AA simply reemphasised the importance of making the effort to find the best possible deal, rather than diving into the first car finance deal that comes along.
“There are some very competitive car finance deals available on the market and small rate differences can add up to thousands of pounds over a number of years,” Mr Fairclough continued.
“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.” – poorcreditcarfinance.co.uk