Which car finance route to go, please?

Hello,

I would like to buy a car I'm used to second hand cars as I have a very limited budget. I'm still confused about the PCP option, scrappage trade ins and hire purchase. My normal route is to get a loan from my credit union, but the older my car is the more I end up paying for repairs. Could you help me in finding my best option because I'm a bit lost with it all?

Thank you

Anita

Anita O' Brien (Cork)

Aug 2018 Filed under: finance

---

Expert answer

Hi Anita,

A Credit Union loan is still, to be honest, a very good idea. As long as you’re getting a decent interest rate and the repayments are comfortable, it allows you to go into the dealership, cash in hand, and argue a better deal for yourself. You will need to do your research ahead of time to make sure that you’ll be able to get the specification you want. PCP is a good option for keeping monthly repayments lower, as it defers part of the repayment to a ‘bubble’ payment, theoretically covered by the value left in the car, at the end of the deal. PCP is really only good for you, though, if you want to go back in every 2-3 years to change your car for a new one. If you’re intending on keeping the car for longer, then Hire Purchase or the good old Credit Union makes more sense.

Read the CompleteCar.ie guide to car finance here

Neil Briscoe - Complete Car Advisor
@neilmbriscoe