Say yes to cheaper van, home and car insurance

Showroom finances deals could cost car owners millions of pounds this year, according to new research.

Car insurance customers may be interested to know that £228 million will be lost by motorists when they sign up for new cars with 2007 registration plates, uSwitch.com has found.

And a further £1,200 per month could be paid out in unnecessary interest if consumers choose to take a finance deal rather than a small personal loan, it added.

Nick White, director of financial services for the group, recommends that people think carefully before taking such a deal, adding that a small amount of borrowing may turn out to be less of a long-term burden.

"By organising the loan before visiting the car showroom, people will not feel pressurised to get the cash quickly to secure the car of their dreams," he said.

Consumer lending in the UK was £213 billion in December 2006, a 6.2 per cent rise over the past 12 months, according to charity Credit Action.

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