By obtaining a reasonably priced motor loan, you can save yourself a tremendous amount of money and avoid paying too much for your next car. One of the greatest factors involved in deciding how much the dealer will charge for an automobile has much to do with the interest rate and the price at which the credit is accrued. Because of this, you can wind up paying quite a bit more than just the purchase price of the car. Motor loans have rarely been exceptionally friendly to the borrower, and now they have become even less so.

Simeon Linstead, Head of Personal Finance at uSwitch.com comments: “Shopping around for competitive loan before shopping around for the car is essential. Buying a brand new car is a big expense which can be seriously inflated if the financial arrangements are not researched thoroughly. Trusting consumers may think that purchasing a vehicle from a reputable dealer also means they will be offered the most competitive finance deal - but this is certainly not the case.

“Paying over the top for finance is one expense that can be easily avoided. Consumers should search for a competitive deal with best buy unsecured personal loans starting from just 7.4% typical APR, 2.77% lower than the average car dealer finance at 10.17% typical APR. This really is a case of ‘act in haste, repent at leisure’ as a loan from the dealer could cost the consumer as much as £1,000 extra in interest. Having the money available before choosing a new vehicle can also add to your bargaining power when on the forecourt - you may find you are able to drive down the cost of the car as you strike an immediate deal.”

“We are living through a period of inflating prices and mortgages are no exception,” explained Francis Ghiloni, mform’s marketing and business development director. “The Bank of England can cut rates but as we have seen over the past year there is no guarantee this will translate into a lower true cost of mortgages at least in the short term.”

Melanie Bien, of Savills Private Finance, the broker, said: “While a potential £5,000 for nothing is welcome, £10,000 won’t get you very far. Lenders have restricted their LTVs on new build even more so than on mainstream residential lending so you will need a significant deposit. You are also restricted to a Persimmon home.”

“We put our success down to the fact that we have more available funds and can move faster than other financial organisations,” said Volkswagen’s managing director Graham Wheeler. “Long-term planning means the credit crunch is not affecting our lending abilities.”

Tim Moss of MoneySupermarket stated, “Firstly, personal loans are extremely hard to get at the moment, but with car finance, your loan is secured against the metal, so it’s a lot less risky for the company. Secondly, while people used to turn their noses up at car finance because they could get a loan for 6.5 per cent somewhere else, they’re now going away and either realising that car finance is cheaper than any personal loan they can get, or their only option.”

Jerry Blackett, chief executive of Birmingham Chamber of Commerce and Industry, said: “There is a general feeling among businesses that a cut in rates at the moment would fuel inflationary pressures and an increase would mean even harder economic times during the downturn.

“Latest figures on the construction industry show that orders are down 21 per cent in the second quarter of the year compared with the same period last year, and that’s how one sector is suffering.

“Stability on interest rates will at least give companies the chance to assess and plan without the yo-yo impact of not knowing what’s around the corner”.

“It is encouraging that, at long last, lenders are responding to the easing in wholesale borrowing costs and passing a discount on to the consumer,” said Darren Cook, a mortgage analyst at market researcher Moneyfacts. “There is a sense that competition is finally returning to the fixed-rate mortgage market.”

David Hollingworth of London and Country stated, “The rates have certainly been getting better in the past fortnight, with lenders responding to each other’s price adjustments,” he said. “You can’t say yet that this is a definite trend, but there is more daylight.”

Francis Ghiloni, business development director of the mortgage advice website Mform.co.uk said: ‘Borrowers should do as much as possible to make their mortgage payments affordable. It is far better to do something such as extending the mortgage term or even moving part of the loan to an interest-only basis than just putting your head in the sand and hoping for the best.

‘Fixed-rates spiked in June so the repricing we are seeing now are easing rates down to the level prior that spike,’ said David Hollingworth, director of communications for mortgage brokers London & Country. ‘Nationwide only repriced a week or so ago, we are starting to see lenders getting back on track managing how much business they do.’

Vicky Redwood, at Capital Economics, said: “An interest rate cut is desperately needed to support the rapidly deteriorating economy. But inflationary pressures continue to tie the monetary policy committee’s hands. The chances of an interest rate rise have receded significantly. But with a rate cut still some way off, the cost of keeping a lid on inflationary pressures now looks like a strong chance of a technical recession.”

Howard Archer, chief European economist at Global Insight, said: “The further significant tightening of credit conditions for both households and corporates in the second quarter of 2008, and the expected continuation of these trends in the third quarter, does not bode well for domestic demand.”

Andrea Rozario, Director General of SHIP said: “The current situation in the property market does not mean the door is closing on equity release - far from it. Falling property values do however make the very high standards that SHIP members must adhere to all the more important to consumers, especially the guaranteed security of tenure and the no negative equity protection that guarantees customers can never owe more than the value of their property.

Declining levels of pension investment - by individuals and employers - and the extent to which Britons have in preference invested heavily in property for many years now, mean that equity release will become increasingly important, even if property values do come down from their recent highs for a while. There is an argument for those planning to access the value in their property to move quickly if their need is imminent. Those looking to the longer term should take comfort in the longer term trend in property values which is always up.”

“U.S. housing starts have left no doubt that the housing crunch is still in full swing,” said Dimitry Fleming at ING Wholesale Banking. “Home builders have now cut production 60% since the peak early 2006, but despite these drastic measures the overhang - as measured by the months of available supply - is still enormous and is even approaching the highs of the early `80s crash. For now, all they can do is wait for Federal help and in the meantime cut, cut, cut production.”

Darren Cook, of analysts Moneyfacts, said “With fears of base rate increases, swap at over 6.3% and rising, and lenders continuing to price more for risk, it is likely that mortgage rates will continue to follow suit. Under these uncertain times, many borrowers are looking to fix their mortgage payments and a five-year deal could become a preferred option rather than the popular two years.