Motor financing packages have been rolling off the assembly line of financial institutions as fast as cars are delivered to dealerships.

One of the most experienced companies offering packages, AIB Finance and Leasing, upped the ante recently by offering a leasing package of 8.8 per cent APR. Customers who take up the offer receive free Automobile Association membership, a mobile phone and a car safety kit.

A car finance plan for £10,000 (€12,697) over five years at 8.8 per cent APR offers a monthly repayment of £220.24 with a payment protection plan, and £203.92 without protection. An arrangement fee of £50 is also charged.

A new entrant to the car loan market, motor insurance provider Premier Direct, called AIB's hand with an 8 per cent APR variable rate and 8.5 per cent APR fixed rate on loans of £5,000 or more. Loans are available for amounts from £1,000 to £15,000, but loans under £5,000 are charged more at a fixed rate of 9.6 per cent APR. The monthly cost for a £10,000 loan over five years at the 8 per cent APR variable rate is £224.14 with payment protection, and £201.40 without the policy. The fixed rate of 8.5 per cent APR produces a monthly premium of £227.01 with payment protection, and £203.70 without a policy over five years. There are no arrangement fees.

First Active offers selected customers a car loan discount voucher which entitles the holder to a 0.5 per cent discount on an approved car loan with the company.

Letters sent out to these customers say First Active's typical APR on a variable rate car loan is 9 per cent over three years and "with the 0.5 per cent APR discount on an approved loan, you'll be saving even more money for the duration of your loan."

The company offers flexible loan terms, payment breaks and a choice of repayment terms from one to five years, subject to the vehicle's age. As a special offer, those who take out a First Active car loan prior to January 31st will receive a contribution of between £25£100 towards their road tax bill, depending on the amount of the car loan.

According to First Active, a variable rate loan of £10,000 at 8.5 per cent APR over five years will cost a borrower £219.60 per month with the repayment protector plan. If the plan is not included, it will cost £203.70 per month. There is no arrangement fee.

The offer closes on January 31st but for "valued customers" of First Active, the discount is open until the end of June.