Why a credit union car loan is better than a PCP

Claire McGovern


Claire McGovern

Why a credit union car loan is better than a PCP

Close to four in ten consumers in Ireland will buy a new car in 2019.

Over half plan to spend more than €10,000 on their new set of wheels, according to the most recent Carzone Motoring Report (2018).

The study also found that one in four consumers who spent between €10,000 and €20,000 on their previous car, used a Credit Union car loan to fund the purchase.*

Credit Union Loans have always been popular amongst car buyers for their straightforward terms and conditions and flexibility, and look set to be a top choice again in 2019. 

Sheila McManus Business Development Manager for Leitrim Credit Union Group explains why she feels there has been a renewed interest in the traditional car loan. 

“A credit union loan is transparent and carries no hidden fees or charges. The buyer owns the car outright once they buy it, while with other more complex finance options, such as a PCP agreement, the buyer has effectively hired the car for a period of time while they make payments.

"At the end of the PCP agreement, they will have to make a balloon payment in order to actually own the car, which can prove to be quite the financial sting in the tail if it hasn’t been budgeted for.”

“For many people, headline rates on PCP agreements can at first look more attractive, but these can easily distract from the fact that essentially PCPs are lease schemes and the buyer will need to be conscious of the mileage they are racking up, because the balloon payment, or guaranteed minimum future value (GMFV), of the car will have been calculated with their annual mileage in mind” Sheila explains.
"In contrast, with a car loan from the Credit Union, the buyer simply borrows the money to pay for a car, which they own immediately, and which they can drive as much as they please.

"They can also sell the car on at any time they wish, should they need to, whereas they do not have this option with a PCP. Credit unions are ethical lenders. We will work with our members to structure repayments that suit their individual circumstances.

"Leitrim Credit Union Group our car loans are available at an affordable APR rate, and are typically approved within 24 hours. We will also offer car insurance soon to make the whole process as convenient as possible for our members. I would really encourage anyone thinking about going the PCP route to have a chat with us first at Leitrim Credit Union Group before making the final decision.

"Our credit unions include, Annaduff Credit Union, Ballinamore Credit Union, and Carrick on Shannon Credit Union, Drumshanbo Credit Union, and Manorhamilton Credit Union & Mohill Credit Union. We are happy to see all our members, no matter how long it has been since they did business with the Credit Union, and of course we are always happy to welcome new members through our door’s to have a chat with us to explain everything we have to offer."

*Carzone Motoring Report 2018

For further information, please contact our Qualified Staff at Leitrim Credit Union Branches on:

Annaduff Credit Union Tel: 071 9638527

Ballinamore Credit Union Tel: 071 964 4627

Carrick on Shannon Credit Union Tel: 071 962 1828

Drumshanbo Credit Union Tel: 071 964 1727

Manorhamilton Credit Union Tel: 071 985 5500

Mohill Credit Union Tel: 071 963 1711