Car loans can include expensive PPI

by Gill Montia

Story link: Car loans can include expensive PPI

Paymentcare.co.uk, the payment protection specialist, is advising motorists to shop around for payment protection insurance (PPI) on new car loans.

Consumers waiting for new models to roll off the forecourts on September 1 may find it easy to secure a low cost loan to make their purchase.

However, the benefits of the low interest rates on offer in the motor trade can be lost if customers fail to investigate their options on PPI.

This needs to be included in the true cost of a car loan and can take the total cost of a new vehicle to considerably more than originally planned.

The Office of Fair Trading has already heavily criticised the single premium PPI arrangement offered by many motor dealers.

Consumers opting for these products will most likely have the cost of the policy added to their car loan.

This means that the PPI element of the loan is subject to interest and can become much more expensive than necessary.

According to Paymentcare, a monthly paid policy from an independent provider can offer far better value for money.

The consumers also has the advantage of being able to cancelled the policy at any time, thus ensuring that only the cover actually needed is paid for.