Car loans in Ireland in 2019

Useful information about financial products and debt management

If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.

Differences between Hire Purchase and Personal Loan

The main difference between using a personal loan and a hire purchase agreement to buy a car is that with a credit union personal car loan you borrow money, pay for your car, and own it immediately.

When you use a hire purchase agreement to buy a car, the motor dealer sells the car to the finance company. The finance company then rents the car to you for an agreed period of time in return for a set monthly repayment over a number of years. During the Hire Purchase Agreement, you can use the car but the finance company actually owns it. They are the owner, and you are the hirer. At the end of the agreement, the finance company passes ownership of the car to you, provided you have made all the repayments. You don’t own the car until you make the last repayment. This means you cannot sell the car if you run into problems making your repayments.

The fees and charges on hire purchase agreements vary, but may include:

• Documentation fees;
• Interest surcharge for missed repayments - this means an additional amount of interest will be charged on the amount unpaid;
• Penalty fees for missed or late payments;
• Completion fee for ownership of the goods to pass to you;
• Repossession charge;
• Rescheduling charge - if your lender agrees to change the terms of the agreement, you may be charged extra.

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