Car buyers are being lured by cheap ‘forecourt finance’ deals which can add thousands to the price — and even leave the car in danger of being repossessed. Two in every three of the 517,493 new cars sold last year were bought on a finance plan offered by a dealer. The number of car buyers taking those loans and hire purchase deals has swelled by more than 10 per cent as people find themselves being refused loans from banks and building societies.

Around one-fifth of the 728,971 used cars bought in 2011 were also through forecourt finance. Dealership offers can mean the cost of a new Kia Rio hatchback is around £99 a month or a Vauxhall Astra estate £199. But there are fears that sales staff are muddying the true cost of the interest offered, omitting fees and failing properly to explain how the deals work. This can make it impossible to compare costs and pick the cheapest and most appropriate deal. And if borrowers struggle financially during the deal, it’s rarely made clear they can lose the car altogether.....Read more here--: Beware the car finance sharks offering loans and hire purchase deals