The PCP bubble

THERE are many who advocate the PCP car finance route as the best option when it comes to purchasing a vehicle – some 126,249 people here certainly thought so last year.

Many of these people are on modest salaries and, under any other system, would simply not be able to afford to drive a brand new car. PCP, however, enables them to do this.

There are however some realities to be considered, not least the fact that many who opt for this scheme don’t entirely understand how it works and what the risks are.

The other issue is one of regulation – or rather, the lack of it. With no hands-on Central Bank involvement, it comes down to perception.

But if something seems too good to be true, then it generally is too good to be true.

It is difficult not to bring to mind the heady days of the Celtic Tiger when countless citizens were assured that they simply couldn’t lose out by putting their money into property – in Ireland, in Bulgaria, wherever.

There are already serious warnings, especially from America, that a giant PCP bubble is building up and we all well know what happens when such a financial bubble bursts.

Regulators need to do more than offer advice in this current scenario.

They need to be more aggressive and take control of this PCP situation in the interests of the Irish people and the economy of the country.