Stand alone motor PPI is cheaper

Motorists can avoid the financial cul-de-sac of lenders’ own payment protection insurance (PPI) on new car loans by low-cost stand-alone PPI says broker Paymentcare.co.uk.

With the latest batch of new cars due to roll off the forecourts on September 1, many motorists will be signing up for a low cost loan to make their purchase, but while they may have got themselves an excellent deal as far as rates go, they won’t be quids in if they don’t shop around for PPI.

“Buying a new car is an affordable luxury for many thanks to current low APRs,” said Paymentcare.co.uk managing director Shane Craig, “but the true cost of a car loan with PPI bolted on is considerably more than consumers may have intended to spend.”

Single premium loan PPI has attracted considerable criticism since the investigation into PPI by the Office of Fair Trading began two years ago.

“The cost of these policies is added to the loan and the whole amount then gathers interest, making the PPI exceedingly more expensive than necessary. A monthly paid policy from an independent provider offers far better value for money and can be cancelled at any time ensuring that customers only pay for the cover they actually need,” said Craig.