What to consider before taking out a PCP Car Loan - Capital Credit Union

What to consider before taking out a PCP Car Loan

Did you ever wonder how car dealerships advertise low loan rates and even some as low as 0%?


Monday the 1st of July will see the launch of 192, which means another explosion of PCP finance. Personal Contract Plans (PCP) finance may seem like an attractive deal at the beginning of your car loan due to the low monthly repayments quoted to consumers. However, hidden at the end of the deal which is usually 3 years, are the remaining repayments of the loan.


According to the Irish Examiner “A third of new cars are bought using PCP with the average value of a contract being €25,000”. This makes the PCP a very popular finance option.


What is important to consider for consumers before taking out a PCP loan is the big question. Is this the product for me?


PCP only suits the type of people who constantly change their car every 3 years, the repayments continue to build up and if you want to end the deal, you are left with what is known as the big “balloon payment”. A lot of consumers are miss-sold this product and feel trapped. This is usually due to the dealership’s finance manager telling them that “this is the product for you”. Some consumers who were planning on paying for their new car with cash are also roped in with sales tricks and low rates.


Here are some tips to consider before going the PCP route:



1. Read The Fine Print

You need to always read the fine print, remember this is a car dealership whose primary job is to sell the car, it may sound like they are looking after your well-being but the whole deal is designed to look like that.


2. Focus on the price of the Car

Make sure you negotiate the price of the car instead of the repayment of your loan.



3. Test every scenario with the finance manager

Limited mileage, coming up with a deposit and no guarantee on the value of the car when you go to trade it in. These scenarios will make you think twice about  PCP finance.


4. Consider alternative financial services

You don’t have to use car dealership finance, get pre-approved with your local Credit Union and enjoy the car shopping hassle free!



Why choose a Car Loan with a Credit Union?


  • First of all, you own the car from day one and it cannot be taken off you, as opposed to a bank loan where you do not own the car until the final payment
  • No penalties for early repayment
  • You will be speaking to a real human being and not a machine
  • There is no hidden charges or transaction fees
  • No deposit is required


You can find out more on our car loans here :


Capital Car Loan



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