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If you've managed to get a bargain price on your new car, the last thing you want is to blow the savings on the finance.

It's inevitable that paying back the money borrowed will eat into your bank balance, so it makes sense to shop around for finance just as carefully as you would for the car itself. Before you compare monthly repayments or annual premiums, you need to know the products.

How do I spot a good deal?

Once you know the type of loan that will suit you, you're in a position to start comparing the deals from different providers.

Whether you're talking to a dealer, supermarket or bank, make sure it quotes the annual percentage rate (APR). Some salesmen will quote the 'flat' rate, which is typically around half the APR. Don't be tricked into comparing this with APRs from other lenders.

Once you know the APR, you're in a position to make an at-a-glance comparison, but the surest way to decide which loan will be cheapest is to look at the total repayable over the lifetime of the loan.

Compare like with like, too. Has accident, sickness and redundancy cover been included in both quotes?

You may be offered GAP insurance - Guaranteed Asset Protection. If your car is stolen or written off, this will cover any shortfall between the insurance payout and the finance owed. It's worth considering, but check the terms of your insurance to avoid paying twice for similar protection.

What if I'm turned down?

Don't be surprised if a lender turns you down, especially if their rate is keen. The cheapest lenders can be choosy. However, if several providers give you the cold shoulder, stop applying and find out why.

It could be that your name doesn't appear on the electoral register. Should that not solve the problem, contact the main credit reference companies, Experian and Equifax, and ask for a copy of your file. For a few pounds, they'll put your details in the post. Challenge incorrect details - the credit reference companies should be able to advise you how.

Even if you've bad debts or county court judgments against your name, there are firms that promise to lend you money. However, their rates are expensive and should be looked upon as a last resort.

Useful contacts

Consumer Help Service Experian
PO Box 8000, Nottingham NG1 5GX
Tel: 0115 934 4050

Equifax PLC
PO Box 300, Glasgow G8 2DT
Tel: 0870 010 0583

Consumer Credit Counselling Service
Tel: 0800 138 1111

National Debtline
Tel: 0808 808 4000