Finance – be informed before you sign up
WITH the 172 car registrations on the horizon, it’s important that you inform yourself on the motor finance deals that are on offer and consider all your option before signing on the dotted line.
Research conducted by the Competition and Consumer Protection Commission (CCPC) regarding consumer behaviour when purchasing cars indicated that 54% of respondents to the survey planned how much they were going to spend and how they would finance their car prior to choosing their last car, while 46% chose the car first.
Chapter 23 – Kerry and West Limerick Credit Union advise customers to set a budget when purchasing a car and stick to it, as often customers can be swayed by dealer finance on offer and commit to purchasing a car without considering all the facts.
The key difference between a credit union loan and say dealer finance, is that you own the vehicle Day 1 with a credit union loan. With PCP/Hire Purchase with dealer finance, you are effectively renting the car as you don’t own it until the final repayment is made.
Helen Courtney Power, Chapter 23 Credit Unions stated “we are advising our members to be prudent when looking at car finance and as sometimes the devil is in the detail. With PCP/Dealer Finance they may be deposits required at the start, balloon payments at the end, mileage restrictions, wear and tear, these restrictions don’t apply in the credit union.
Competition and Consumer Protection Commission back up this claim. This May, the CCPC raised concerns about car finance products with the Department of Finance and Central Bank of Ireland following an increase in people buying new cars using types of hire purchase.
The commission said it was “of the strong view that there are certain characteristics of car finance products that mean some consumers could take out a product which may not be affordable or in their best interests in the long term”
With a credit union loan, there are no fees, and no charges and you also have the flexibility of clearing your loan early without any penalty. Also, if you run into arrears, you can sell the car, such options aren’t available under PCP deals, as you are essentially renting the car until the final payment is made.
The credit union offers free Loan Protection and Life Savings Insurance so in the event of your death or permanent disability your loan is cleared. With dealer finance, there is no such protection, so repayments will still have to be made or alternative arrangements made to pay outstanding debt.
Helen added “Chapter 23 Credit Unions is made up nine credit unions throughout Kerry and West Limerick, so a local credit union is never too far away. Call and ask for a car loan quote today It’s worth putting in the time to study and understand the different finance options available, it will save you money in the long run” she concluded.