'Opt for loans' when buying a car

Motorists planning on buying a new car next month should take out a loan instead of opting for dealer finance, it has been advised.

With the release of the new '08 registrations next month, it is expected that people will rush out to get their hands on the new models.

Research conducted by moneysupermarket.com has shown that individual drivers could save as much as £950 by taking out a cheap loan instead of going for the dealers' finance deals, which may result in paying off a lot more interest.

Tim Moss, head of loans at moneysupermarket.com, said: "If 425,000 new cars are bought next month with forecourt finance rather than low-rate personal loans, Brits could be paying out an extra £402 million in interest.

"It is vital to shop around for the best deal to finance your new car to help you avoid paying over the odds."

Moneyfacts.co.uk has reiterated this, but adds that people should also shop around for cheaper car insurance to save money.