Cars Finance Ireland | PCP vs Hire Purchase - Which One is Right for You?
Need car finance in Ireland? This guide covers your options, including PCP and hire purchase, so you can choose the one that’s right for you when it comes to cars finance Ireland.
Car Finance Ireland
Car finance in Ireland can be confusing. Understanding the basics helps you make informed decisions.
Car finance lets you spread the cost of a car over time, making it more manageable and often more affordable than paying upfront. Some options offer a simple process for buyers.
In Ireland, the Personal Contract Plan (PCP) and hire purchase are the most popular options. PCP has become very popular, with around 70% of consumers choosing this method for both new and used cars.
Hire purchase offers a straightforward path to car ownership. You own the car outright at the end of the payment term.
Car finance can take different forms, such as PCP, hire purchase, leasing, or other payment agreements. Each represents a specific form of finance arrangement with its own advantages and considerations.
Personal Contract Plan (PCP) Explained
The Personal Contract Plan (PCP) is very attractive for its affordability. A big chunk of the car’s cost is deferred until the end of the term so lower monthly payments than other finance options.
PCP agreements are 3 years. You can drive away in a new or used car with manageable instalments.
At the end of a PCP agreement you have 3 options: make a final “balloon” payment to own the car, trade it in for a new one or simply return the car. This flexibility can be great if you like the idea of driving a new car every few years.
But there are potential drawbacks, mileage limits and financial penalties for exceeding them. Anyone considering a PCP should understand these terms and weigh them against their driving habits and financial situation.
The low monthly payments are attractive but the balloon payment at the end can be big and may not be feasible for everyone.
Hire Purchase Agreements
If you want to own your car outright, a hire purchase agreement (often abbreviated as HP) might be the way to go. With a hire purchase agreement, you pay a set deposit and then make payments each month over an agreed period, usually 2 to 5 years, with 3 years being the most common.Once you’ve paid all the monthly payments the car is yours with no final lump sum payment. Unlike PCP, hire purchase (HP) means full ownership after the payment period.
A big advantage of hire purchase is no mileage limits. This is great for those who drive long distances regularly. Also the terms are straightforward and set at the beginning and the total cost is higher than the cash price of the car due to the interest charges.
Hire purchase contracts also have a cooling off period. This allows you to withdraw from the agreement within 10 days if you change your mind, adding an extra layer of security and flexibility.
PCP vs Hire Purchase
When choosing between PCP and hire purchase compare the overall cost, flexibility, your long term goals and make sure to find the best deal for your needs. PCP agreements have lower monthly payments, focusing on the car’s depreciation rather than its full value.
This can be more affordable in the short term but you need to consider the final balloon payment and any mileage restrictions.
Hire purchase spreads the cost of the car over the duration of the contract and is a way to buy a car through finance. The advantage is owning the car outright at the end.
The total cost may be higher due to interest but the no mileage limits and the straightforward nature of the deal makes it a popular choice for many buyers.
Business Leasing
Businesses looking to manage their fleet will find several benefits in leasing. Leasing allows businesses to operate a fleet of vehicles without significant upfront capital. For any company, leasing can be a tailored solution that addresses specific fleet management needs.
This can be particularly beneficial for a modern, fuel efficient fleet that enhances the company’s corporate image. Leasing supports a company’s fleet expansion and provides a flexible solution for adapting to changing business requirements.
Business leasing agreements often include services like regular maintenance and roadside assistance, making fleet management easier.
Businesses also get regular vehicle replacements so their fleet remains up to date and reliable.
Personal Leasing
Personal leasing is for individuals who want the flexibility of driving a new car without committing to ownership. You can have a new car with manageable monthly payments and the option to switch to a new model at the end of the lease term.
At the end of the lease term you can return the car or opt for another new car through a new lease. This flexibility makes personal leasing a popular option for those who don’t want to commit to one car for an extended period.
APR and Lending Criteria
Understanding APR is key when looking at car finance options. APR is the total cost of borrowing, including interest and any fees, expressed as a percentage.
This is important for comparing different finance offers and finding the best deal.
Lending criteria for car finance includes a minimum age requirement, residency status and good credit history. Applicants will need to provide documentation like proof of income and ID to meet these criteria. Providing accurate and complete information will help with a smoother approval process and better rates.
Car Finance Deposits
Deposits play a big part in car finance agreements, as an upfront payment to reduce the total amount financed. For PCP and hire purchase agreements the deposit is usually 10% to 30% of the car’s value.
Knowing these requirements will help with your budgeting. It will help you see how affordable the car is.
Part exchanging a car can contribute towards your deposit, the trade in value can offset the cost of your new car. This can make it easier to manage the initial outlay and get the car you want, especially when buying from a dealer.
This can be a money saver.
Flexible and Affordable Finance Options
Finding a finance option that suits your budget and lifestyle is key. Companies like Toyota Financial Services offer a range of flexible and affordable finance options to suit different financial situations.
These can be tailored to your needs, providing a transparent and easy way to manage your car payments.
A car finance calculator will show you the total costs involved, so you can plan your budget. You can adjust variables like repayment term and down payment to try different scenarios and find the best option for you.
See our available stock of vehicles for finance and find the car for you.
How to Apply for Car Finance
Applying for car finance is straightforward but some preparation is required. Gather your ID, proof of address and employment details to make the application smoother.
Applications can be submitted online, over the phone or in person at a bank branch, so it’s flexible.
Online applications under €30,000 can be approved in 3 hours, so it’s quick.
For larger amounts or hire purchase contact the shop bank directly to discuss options and make the application process smoother. This is a good time to take advantage of a sale.
Car Finance Calculator
A car finance calculator is a must have when buying a car. Enter the loan amount, interest rate and loan term and it will show you your monthly payments and total cost.
This will help you make an informed decision and plan your budget.
Many car finance calculators let you try different scenarios by adjusting variables like repayment term or down payment.
This will help you find a finance option that suits you and drive away in your next car with confidence for the future.
Customer Service and Support
Customer service and support is important when looking at car finance options. Gerry Caffrey Motors puts customer satisfaction first with a dedicated team to provide fast and professional service. The professionalism of their sales staff ensures that every customer receives knowledgeable, courteous and attentive assistance.
They were awarded the National Customer Experience Award which shows their commitment to improving customer interactions. Many customers are happy with their buying experience, often praising the helpfulness and support they receive.
Gerry Caffrey Motors puts customers first, so you get a transparent and hassle free buying experience. Customers who have recently bought vehicles also mention the excellent aftersales support provided by the team.
Whether buying a new car or looking for aftersales support their team will provide quality care to make you feel at home and well looked after throughout the entire brand experience.
Find out what sets them apart.
Finally...
Choosing the right car finance option is key to your next car purchase. From car finance basics in Ireland to PCP and hire purchase we’ve covered it all.
Each finance option has its pros and cons so make sure you weigh up your options.
In the end it’s all about your financial situation, driving habits and long term goals.
Take the time to understand your options and use finance calculators to make an informed decision that suits you.
Contact Gerry Caffrey Motors to explore these options further.