Drive down car loan cost
More than 400,000 new cars are set to be sold next month - 20% of all cars bought from showrooms this year - as people rush for the latest "58" plates.
But price comparison website uSwitch says half will be purchased with dealer-based finance - which it claims wastes motorists a combined £168m.
USwitch said by instead opting for the cheapest non-secured bank loan new car owners could save up to £1,000 each.
USwitch says the average interest rate for finance at car dealers is 10.17% APR - 2.77% higher than the cheapest unsecured personal loan at 7.4% APR.
The comparison website identified Asda's Personal Loan as the cheapest for a loan of £10,000 over three years.
It said although the credit crunch has resulted in a 3% decline in car sales, motorists that can afford to buy should not waste money on costly finance.
By opting for a low-rate personal loan instead of dealer finance, people could save an average of £826 in interest over three years, uSwitch says.
"And having the cash ready before car hunting will improve bargaining power."
Moneyback Bank is the second cheapest lender says uSwitch - at 7.6%, followed by AA, Sainsbury's, Bank of Scotland and Alliance & Leicester, all at 7.7%.
Simeon Linstead, head of personal finance at uSwitch.com, said: "While the best deals may only be available for those with a good credit history it is still worth shopping around.
"Our analysis shows some dealers charge up to 11.9% typical APR."
Simeon Linstead of uSwitch said other things to look out for when buying a new car are 0% finance deals offered by some manufacturers.
"These deals are definitely worth considering if you can get one but you may have to pay a hefty deposit."
USwitch said the six most popular cars bought with finance are the Ford Focus, Ford Fiesta, VW Golf, Peugeot 207, Vauxhall Astra and Vauxhall Corsa.
The Retail Motor Industry Federation said it is surprised by the uSwitch figures which claim banks offer much better loan terms than car dealers.
Spokeswoman Sue Robinson said: "Finance packages from car dealers have improved a great deal and we believe many of them are comparable with banks.
"Research from the Finance and Leasing Association has shown there are a lot of good deals out there."
The Finance and Leasing Association said: "USwitch's release is misleading and doesn't compare dealer finance with bank loans on a like-for-like basis.
"The interest savings uSwitch quote are based on a 'best buy' loan but only an 'average' dealer agreement.
"It also fails to take into account how the availability of credit has impacted consumers, more of whom are now heading to the dealership for finance."
The Finance and Leasing Association said: "A year ago, 46.2% of consumers took finance from the dealer for their car. This figure is now 50%.
"FLA figures show leasing and personal contract purchase plans have risen 27% and 18% respectively in the past year.
"This shows consumers are taking advantage of the benefits provided by dealer finance - namely the flexibility and choice of products."