WITH the 712 car registrations on the horizon, Killarney Credit Union has issued some timely advice to members of the public to ensure they are fully informed on the motor finance deals that are on offer and to consider options before signing on the dotted line.
Research conducted by the Competition and Consumer Protection Commission regarding consumer behaviour when purchasing cars indicated that 54 per cent of respondents planned how much they were going to spend and how they would finance the transaction prior to choosing their last vehicle, while 46 per cent chose the car first.
Killarney Credit Union advises 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 dealer finance is that the driver owns the vehicle from day one 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 of Killarney Credit Union, remarked: “We are advising our members to be prudent when looking at car finance as sometimes the devil is in the detail. With PCP/dealer finance there may be deposits required at the start, balloon payments at the end, mileage restrictions and wear and tear but these restrictions don’t apply in the credit union”.
The Competition and Consumer Protection Commission back up this claim in May when it raised concerns about car finance products with the Department of Finance and the 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. If you run into arrears, you can sell the car but such options are not 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 death or permanent disability, the 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 Courtney Power added: “Killarney Credit Union has three branches,so a local credit union branch is never too far away. Call and ask for a car loan quote as 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”.
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