Well yet another nonsense survey got reported recently but as sadly so many people listen to reports sent out by banks or building societies I felt that I just had to show what it contained and explain why I believe the report to be nonsense.

The Alliance and Leicester sent out a report saying that almost half those using motor loans to finance the purchase of new cars are wasting their money on expensive deals. They go on to explain that 47% of those who borrow to buy are losing out. "In some instances, individuals could be shelling out an extra £1,400 a year more than they need to on car loans."

Well of course to a certain extent the Alliance & Leicester is correct if all you are comparing is interest rates but what about the legal position. Let"s say that half way through the contract term you decide to replace the car. Under the HP voluntary termination rules you can simply hand the car back to the finance house with nothing more to pay (as long as you have repaid over 50% of the total payable under the agreement).

So if the settlement cost on your car was £8,000 and you found that the car was only worth £6,000 you could hand the car back without any further financial penalty. In the case of a personal loan you would have to pay off the £8,000 which would mean that the dealer would have to "juggle" the figures on the replacement car. Supposing also you had a problem with the car and couldn"t get it resolved with the dealer direct, you can sue the finance company under section 75 of the Consumer Credit Act. The funder will be threatening or even sue the dealer which normally means that you will receive a positive response from the dealer. Also, you can negotiate the finance with the dealer. He is flexible and would not want the car supplied elsewhere so you can normally beat them back a little. So not as clear cut as Alliance and Leicester would have you believe.

Another ill advised body is the BVRLA who are protesting, rightly so, against the proposed additional changes to the Block Exemption rules making it more difficult for manufacturers to give excessive discounts to fleet users unless they can provide details of end drivers.

The BVRLA points out that large fleet users such as the major leasing companies do not launder cars in the same ways as dealers do - as they exposed last year, whereby the dealers set up daily rental companies allowing for the dealers to acquire cars at huge discount then sell the cars as new straight off the forecourt. Whilst this is true leasing companies and car supermarkets have been buying cars through daily rental companies for years in a car laundering routine.

It"s the way we see some great deals occasionally!