16 February 2012
New car registrations come into force on the 1 March 2012, but drivers opting for the ease of forecourt finance1 over a personal loan could end up paying more than they need to.
Nationwide research shows that borrowers sourcing finance for a new car could be spending nearly £1,300 more than they need to by opting for forecourt finance over a Nationwide personal loan.
The average APR for someone with a good credit rating obtaining forecourt finance is currently between 9%-12%2 for new cars. There may also be additional charges with forecourt finance such as a finance facility fee and/or option to purchase fee.
Cost of £7,500 loan over 5 years
By contrast Nationwide charges 6.3% APR Representative to FlexAccount customers using the account as their main current account3. The rate is applicable for loans of up to five years between £7,500 and £14,9994 and can be taken out through a branch, over the telephone or via the internet.
Those who do not have a Nationwide current account can either take out a Nationwide current account in branch and make it their main account in order to qualify for a 6.3% APR Representative rate today or take advantage of a competitive rate of 6.4% APR Representative. This offer is available if customers apply through an online aggregator, such as Moneysupermarket.com, for loans between £7,500 and £14,999 for a term of up to five years.
Graham Pilkington, Nationwide's Director of Banking, commented: "New cars can be expensive, but by putting a small amount of time and effort into sourcing the finance options available you could save nearly £1,300.
"While some car dealerships offer interest-free HP in many cases it's part of a special promotion on selected models and often requires a high deposit.
"The Nationwide personal loan offers one of the lowest rates in the market and is worth considering for your new car finance."
Notes to editors:
1 Forecourt finance defined as finance arranged through a car dealership that is selling the new car.
2 Source Mintel Report 'Car Finance – UK, January 2012'
3 To apply, customers must hold a current account with a Visa debit card (not cash card +) and:
- Have been paying in £750 a month for the last three months (excluding internal transfers); or
- Complete an account transfer to us (from a non-Nationwide account) using our Account Transfer Service or have done so in the last four months. For this offer the account transfer must be requested via branch or telephone and the account must be eligible for an overdraft.
4 For loans outside of this range, personalised rates apply.
Nationwide Personal Loan
- The interest rate offered will depend on the amount borrowed and the customer's individual circumstances.
- One fixed rate for the term of the loan – repayments never change.
- No upfront charges or arrangement fees.
- No repayments for the first month
- All loans are subject to status and are available to those aged 18 or over only.
- Applications are required for all products. Further details of terms and conditions are available on request.
* If you accept your quote, we will leave a record of our check on your credit file that other lenders can see. This is a normal part of many credit application processes but it might affect your ability to obtain credit elsewhere for a short period of time.
Nationwide Building Society subscribes to the Lending Code.
Customers should consider all borrowing options carefully and seek independent advice.
Nationwide Building Society is authorised and regulated by the Financial Services Authority under registration number 106078. Credit facilities other than regulated mortgages are not regulated by the Financial Services Authority. You can confirm our registration on the FSA's website, or by contacting the FSA on 0845 606 1234.
About Nationwide Building Society:
- Nationwide is the world's largest building society as well as one of the largest
providers and a top-three provider of
mortgages in the UK. It is also a major provider of
Nationwide has around 15 million members.
- With around 16 million members, Nationwide has a relationship with almost a quarter of the UK population. In the first half of 2010/2011 alone we helped 10,000 people buy their first home
- Since the credit crunch began in 2007, Nationwide has remained profitable against a very difficult economic environment. In the year 2010/11 Nationwide made a strong underlying profit of £276 million – up 30% from the previous year
- Our strong financial performance and prudent business model meant that Nationwide was included in Global Finance magazine's Top 50 Safest Banks in the World, one of only three UK institutions in the Top 50