Car shopping is a fun and exciting time but finance shopping for your new car can be taxing!
Many car dealers are offering PCP Finance packages that can look very attractive, but what do you really know about PCP finance? And why should you choose a Credit Union Loan over PCP Finance? Read on…
What is PCP?
Simply put PCPs are a modern twist on the old hire purchase agreement.
- A key aspect of a PCP is the need for the car to retain its agreed value at the end of the 3 or 5 year deal.
- This means the PCP Finance companies apply a lot of restrictions on the agreement – such as on mileage and on servicing.
- PCP Finance can tie you to debts you may not be able to afford, if you are faced with a balloon payment or if you run into financial difficulty during your PCP agreement. Unlike a car loan from your credit union, you cannot sell off the car to repay your debt or renegotiate your repayment terms. There is no flexibility in the PCP repayment terms, 3 years is 3 years.
- If the car falls below the agreed value due to an issue with the car (car crash or exceeding agreed mileage) or changes in the second hand market, then you are left with no equity in the car. In the past year there has been a dramatic change in the second hand car market due to the volume of car imports from the UK and the decline in sterling.
- There can be additional fees and charges – always make sure to read all the small print! There can often be missed repayment fees or repossession charges.
- When you take out a PCP contract, your lender will send details of the repayments to a credit reference agency, such as the Irish Credit Bureau (ICB).
Benefits of a MPCC Credit Union Loan include
- You own your car from day 1 – this means you can sell it or change it whenever you want
- No restrictions on mileage or who services your car, or what make of car you buy next
- No balloon payments
- No admin or transaction fees
- With a MPCC Credit Union Loan you have the buying power of a cash buyer
- You can make a lump sum payment, repay your loan early or increase your repayments with no penalties. Other lenders may charge you extra for paying them back faster! With PCP Finance there is no flexibility with the repayment terms.
- Your MPCC Credit Union loan has Loan Protection Insurance at no additional cost to you. Other lenders may charge you for this.
- Our interest rate is competitive
Before you sign on the dotted line, call us about a Car Loan and feel the freedom of driving a car you own!