Car Manufacturers now offering loans to boost sales

As the UK car finance market is so competitive, some manufacturers are now offering exceptional deals, sometimes interest-free credit on selected models.

 As the UK car finance market is so competitive, some manufacturers are now offering exceptional deals, sometimes interest-free credit on selected models.

A report carried out by the Daily Telegraph shows that several car manufacturers are now providing their customers with the opportunity to take out loans to purchase cars. The idea was started due to some car companies retracting finance deals that customers to pay over a set period of time.

When buying on finance you have to be careful about the deals and make sure you are not paying over the odds for your car loan. If in doubt, check the price out against other loan providers, you might find you were close to signing up to a bad deal.

If you have had problems with loan repayments, credit cards, or County Court Judgments then you might have a bad credit history. This doesn't mean you can't get a car loan, but it makes getting credit more difficult and your finance payments may be higher.

Of the manufacturers mentioned in the report, Hyundia had the most impressive deal, offering zero percent over 4 years on the i30 hatchback model, subject to a 20% deposit. The offer runs until 30th September 2008, and also comes with an impressive five year warranty. There is also a three-year zero percent deal available on the Hyundai Tucson and Santa Fe.

Other manufacturers attempting to improve sales by offering loans are Renault, giving customers the option to take out a loan with a 6.9 % APR on its Scenic Dynamique 1.6 VVT and Skoda, offering free insurance to customers that buy one of their cars with a 6.2 per cent loan.

Earlier on in the month, the Finance and Leasing Association reported that between June 07 and June 08, half of all new cars were paid for using finance, compared to 46.2 % the previous year.