The annual car-buying rush will kick in just after Christmas. In between choosing the interior colour scheme and checking to see if ABS comes as standard, paying attention to the terms and conditions on the car finance package could be a smart move.

"A lot of people like to have the finance arranged first. It gives them better bargaining power so they can just stick to the car in terms of negotiating," says Mr Joe Cunningham, sales and marketing manager at AIB car finance and leasing.

According to AIB's Car Finance Guide, around two-thirds of the estimated 450,000 new and used cars sold in Ireland every year are bought with the help of some kind of plan.

The four main types are car loans, hire purchase plans, leasing or personal contract purchase (PCP).

Hire purchase, leasing and PCP can be collectively referred to as "forecourt finance" - special offers sold by the garage on behalf of a finance company and often linked to a particular make and model of car.

Two advantages in securing a car loan from a bank or credit union over other forms of car finance are that there will be no deposit or large balloon payment at the end and it gives you instant ownership of your car.

"By deferring payments, people are only really paying for the use of the car," says Mr Paul Gurhy, head of Bank of Ireland's consumer lending business. The structuring of some forecourt finance deals means drivers can have a car worth €5,000 at the end of the repayment term, but still owe €6,000 or €7,000 on it, he says. "It is negative equity on your car."

One potential disadvantage is that the size of the car loan will depend on the customer's credit rating and capacity to repay, so some people may need to use additional savings to make up the difference in what the bank says they can afford to borrow and the price of the car.

The average car loan at Bank of Ireland is €9,000, with a typical repayment period of three years. At AIB, Mr Cunningham describes a typical loan as €15,000 with customers initially opting for a four-year term, but often settling early after three years.

In general, it is recommended that the length of the loan does not exceed the life of the car.

The table above shows some of the rates available at the main banks. Interest rates tend to fall as the size of the car loan increases. Bank of Ireland offers a significantly better rate for customers who apply online, while at Ulster Bank holders of U First current accounts can subtract 0.5 per cent off flat interest rates for all personal loans.