Thinking of a new 172? A Credit Union Car Loan has benefits that you simply don’t get elsewhere! We’ve highlighted the difference between a loan with our Credit Union and PCP finance.

PCP Pitfalls (1)

  • Unlike a PCP you own the car from the outset.
  • You can sell the car on at any time.
  • You can borrow for the full amount.
  • There are no hidden fees, admin charges, transaction charges, set up costs or balloon payments.
  • Repayments are calculated on your reducing balance, so you pay less interest with each repayment
  • The interest you pay on a credit union loan is the full cost of the loan so it is fully transparent.
  • Your credit union loan is insured in the event of your death – subject to terms, conditions and eligibility criteria – at no direct cost to you.
  • You can pay off your loan early, make additional lump sum repayments or increase your regular repayments, without a penalty. Other lenders may charge you extra for paying them back faster!

These benefits aren’t only for people buying a new car. They apply to many different types of loans.

PCP Pitfalls

  • You don’t own your car until the final payment is made
  • Most PCP’s require a large balloon payment at the end to terminate the agreement
  • Most PCP’s have restrictions in respect to the condition of the car and/or the mileage you incur. A lot of wear and tear may also mean you do not get the full value of the car agreed at the start of the deal. High mileage can mean a lower minimum guaranteed value.
  • PCP’s are a way of trying to ensure that you will come back and buy another car from the same dealer or manufacturer. All well and good, but what if you don’t like the brand of car or range they have to offer anymore?
  • If you have a crash and the cost of the repairs is greater than 66% of the original list price then you may also not get the minimum value you were hoping for.
  • Because a lot of the repayments are deferred, the interest costs may be low initially, but the total ends up being high over the full length of the agreement.
  • Dealers and car-company banks are able to offer lower interests rates on the deals for the first three to five years because they retain ownership of the vehicle, lowering their risk.

Example of a Car Loan

Rate: 7% (7.23% APR)   Amount: €15,000

Loan Period: 5 Years

Weekly Repayments: €68.38

Total Repaid: €17,777.75

You can get your own loan estimate by using our Loan Calculator.

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