If you’re one of the eight million Britons planning to buy a car in the next six months, don’t just sign up for your dealer or bank’s finance package.

It could add thousands of pounds to your costs.

Samantha Owens, head of personal finance at money search engine Moneyfacts.co.uk, warns: “Get your finance choice wrong and it can prove a costly mistake.”

Some dealers offer interest-free credit and, provided you read every word of the agreement so you know what you’re getting into, it can be a boon.

But, according to personal finance switching site uSwitch.com, the average annual interest rate on dealer finance is 10.76 per cent – and many charge considerably more.

That’s why a low-cost personal loan can be much better value.

These are available from 6.3 per cent – but they too can be far more expensive.

Samantha says: “On a £5,000 loan, the difference between choosing the best and worst loan deal could cost you an extra £861, while the wrong choice on a £10,000 loan could see you out of pocket by more than £2,600 – or, to put it another way, increase the cost of financing your car by a massive 26 per cent.”

That’s why it’s vital to compare rates before committing yourself.

September is one of the busiest months of the year for remortgaging.

Almost 90,000 homeowners will go in search of a better deal on nearly £46 billion worth of home loans, says lender Abbey.

On average, they’ll spend just under seven hours shopping around.

Nici Audhlam-Gardiner, Abbey’s head of mortgages, says: “Re-mortgaging might be a time-consuming process, but it’s worth investing the time and effort so that you don’t have to invest too much of your hard-earned cash when your current mortgage deal comes to an end.

“In particular, customers coming to the end of fixed-rate deals in the next month will find it hard to match their previous mortgage deal as rates have gone up – meaning good deals become even more important.”

That’s why, no matter how boring you might think mortgage shopping is, it’s time well spent.

The difference between a good deal and a bad one can be thousands of pounds of interest – and a lot of grief – over the years.

For many people, a major step in the remortgaging process will be deciding whether to go for another fixed-rate deal or to opt instead for a discounted variable rate or a base rate tracker.

Several experts are saying fixed rates look expensive – and that today’s decision by the Bank of England’s monetary policy committee to leave rates on hold makes it more likely the next move will be downwards.

If they’re right, a tracker could be a very wise choice indeed.

Mortgage lenders say they want our business, but many of them make their loans so complicated it can be well nigh impossible to choose between them.

The range of interest rates, fees, terms and conditions they offer can seem utterly mystifying.

Abbey currently has 89 different mortgages, Scottish Widows 97, C&G 101 and Standard Life an incredible 219, according to financial information provider Moneyfacts.co.uk.

Julia Harris, the site’s mortgage expert, says: “The number of mortgage products offered by some lenders is more than enough to baffle the average man on the street.”

To work out the true cost of each deal, as well as the rates and fees, you have to factor in the associated valuation and legal costs.

And if you need to borrow 90 per cent or more of your property’s valuation, you are also likely to face a higher lending charge.

The answer, of course, is to do your homework.

The more research you do, the less daunting the mortgage choice will become.

Spend a few hours on the internet reading…

Then enlist the help of an independent mortgage adviser…

And you’ll be well on your way to finding the right deal for your needs.

More than a quarter of British adults have made no provision for their retirement.

The number of men and women aged 30 to 49 who say they have “no form of pension” has increased to 26 per cent from 20 per cent a year ago, says financial services provider Alliance Trust.

Things get even bleaker when you separate out the sexes, with nearly a third (31 per cent) of women admitting they haven’t any pension provision, compared to 23 per cent in 2006.

The figures for men are only slightly better at 22 per cent and 17 per cent respectively.

I’m staggered.

Who on earth do they think is going to provide for them in old age if they don’t do it themselves?

Certainly not the state. Have you checked out state pension rates recently?

Consumers’ organisation Which? says the average person reckons they will need an income of £312 a week to enjoy a comfortable retirement.

But the basic weekly state pension for a single person is just £87.30 – and, contrary to popular belief, this isn’t an automatic right.

To qualify, men need to have paid 44 full years of National Insurance contributions and women 39.

Assuming you have, pension credit will top this up to £119.05, which means that if you don’t do something about it, you could be almost £193 a week – or more than £10,000 a year – short.

That’s an awful lot of money to do without, and it’s likely to put all but the most basic necessities out of reach.

The solution? It’s simple – start saving right now!

The most popular reasons for signing up to equity release plans are funding home improvements and treats such as exotic holidays.

The next most frequent motives are the need to pay for a divorce or buy out an ex-partner, according to new research from financial services firm Saga.

Equity release, which allows the over 60s to access the cash tied up in their homes, is becoming increasingly popular.

But whatever the reason for taking out a plan, it is not something that should be done lightly.

This type of loan should always be considered as a last resort, when all other options have been ruled out.

Yes, it allows you to get hold of cash at a time when you need it…

And it may seem very appealing because there are no repayments to be made until you sell up or die.

But that doesn’t mean equity release is good value.

In fact, the costs are far higher than most people realise.

Depending on the plan you choose, you’ll be charged interest, which rolls up – incurring interest on the interest – until it is repaid.

The other possibility is that you – or your heirs – will be expected to hand over a sizeable percentage of your home’s eventual sale price.

Either way, you, or they, can expect to repay several times more than you originally borrowed.

So before you opt for equity release, think hard about what you want the money for – and whether it really is worth it.

The vast majority of current account holders haven’t a clue how much it costs to go into the red.

And millions think – wrongly – that an overdraft is likely to be cheaper than a personal loan.

Even those who have successfully reclaimed bank charges often can’t confirm how much they were made to pay, says MoneyExpert.com.

In fact, consumer organisation Which? has calculated that the UK’s banks made £4.7 billion from unauthorised overdraft fees and penalty interest last year.

The average interest rate for unauthorised borrowing is around 25 per cent.

And there is typically a charge of £20 to £39 each time you go over your limit without permission or a direct debit or cheque bounces.

Yet more than 40 per cent of those questioned by MoneyExpert admitted they had no idea about the fees their bank charged for unauthorised borrowing.

Many others reckoned it would cost less than £20 a time.

More than two-thirds of those who claimed to know their bank’s authorised overdraft rates underestimated these too, saying they were paying between 5 and 10 per cent.

The actual authorised borrowing average is 12.35 per cent – while personal loan rates start at 6.3 per cent.

MoneyExpert chief Sean Gardner says: “While it’s ultimately the customer’s responsibility to avoid going beyond their overdraft limit, banks should make their charging structures more transparent.

“They could also provide a clearer indication of when customers are close to going in the red.”

These are lovely ideas, but with so much money being made from customer ignorance, why on earth would the banks want to change their ways?

Homeowners are becoming increasingly nervous about the Bank of England’s monthly interest rate decisions.

There have been five rate rises in the past 12 months, and the latest rate-setting meeting takes place next week.

For many people, another hike could be the last straw.

As a result, four out of ten borrowers now get anxious in the run up to the Bank’s meetings, says Intelligent Finance.

The traditional way to protect yourself from this kind of worry is to take a fixed-rate loan.

But, as the internet bank and mortgage lender points out, another solution is to transfer to an offset mortgage.

As the name suggests, these offset your savings against your debt – saving thousands of pounds of interest over the mortgage term, and allowing you to clear your debt years early.

IF’s managing director Mark Parker says: “With interest rates on the rise and purse-strings tightening, it’s important to make every penny work as hard as possible.

“Offset mortgages give peace of mind, negating the effects of a rate hike and giving the flexibility to lower monthly payments.”

Offsets don’t work for everyone though, and if you don’t have a large savings pot, they can actually leave you worse off than a traditional mortgage deal.

So make sure you do your sums before signing up for one of these loans.

Abbey has launched a credit card offering a very attractive 5 per cent cashback on £1,000 of supermarket shopping.

That’s a potential windfall of £50.

But before you rush off to fill out your application, there’s something else you need to know.

After an initial three months interest-free for purchases, those who don’t clear their spending every month will be charged a less than attractive rate of 15.9 per cent.

As a result, heavy users could soon find interest charges more than outweigh the cashback benefits.

Barclaycard, IF and Halifax all have cards which charge less than 10 per cent interest, and for someone who keeps a running balance, they could be better value.

But the interest rate isn’t the only cost you need to keep an eye on when choosing plastic.

Last year the Office of Fair Trading ruled credit card companies must keep penalty fees to a maximum of £12.

And while this might seem like a step in the right direction, consumer organisation Which? says they have simply found other ways to recoup the lost income.

So when you’re choosing a new card, it’s essential to check all the small print.

Which? advises paying close attention to…

• Annual fees and low usage charges
• Balance transfer fees
• Minimum payments designed to maximise your interest bill
• Payments allocated to the cheapest debt first
• The way interest is calculated
• Credit card cheque interest rates and fees
• Cash withdrawal rates and fees

And now some more (tentative) good news for house hunters and mortgage seekers…

In its August house price index, online estate agent Rightmove reports that London property asking prices have fallen for the first time in a year.

It reckons this trend could spread, bringing down house price increases to about the same rate as wage inflation – in other words, around 3 to 4 per cent.

This may seem depressing if you have a home to sell.

But if you’re a first-time buyer, trying to get that tricky initial foothold on the property ladder, it could be cause for celebration.

In fact, it could be something for all borrowers to shout about.

As Rightmove points out: “This… leads to the conclusion that the pressure on the Bank of England to raise interest rates again is reducing significantly.”

Fingers crossed…

The other day, in Britons struggling with debt repayments, I said there might be a chink of light amid all the financial gloom.

But I spoke too soon as far as anyone with a troubled credit history is concerned.

The recent global stock market falls were sparked by US lenders getting in a mess over what are known as “sub-prime” or impaired credit loans.

Basically, they lent too much money to too many people who, it turned out, weren’t able to pay it back.

Now, here in the UK, lenders are getting the jitters about these mortgages.

Northern Rock has priced itself out of this sector of the market by raising interest rates by up to 1.25 per cent and ditching base rate tracker loans for borrowers with poor credit records.

Specialist impaired credit mortgage lender GMAC-RFC has also lifted its rates, and it looks as if other sub-prime lenders will follow their example.

This doesn’t mean you won’t be able to get a mortgage if you have a chequered financial history, but it does mean it’s going to be harder to find a good deal.

Because of this, it’s more important than ever to shop around – and to borrow responsibly.

If you’ve had credit problems in the past, it’s crucial not to over-extend yourself.

Stick with a debt you can comfortably afford…

Be financially disciplined so you can keep up the repayments…

And hopefully, before long, your troubles will be a thing of the past.