Its that time of the year again when you might be looking at changing the car. Radio & Television are full of adverts extolling the virtues of one finance deal over over another. Credit Unions can’t compete with the marketing budgets of the Banks and Car Manufacturers but we think its important that you have all the facts before making a decision on how you fund your next car !
As a community lender we lend out a portion of the money that our members save with us to help other members borrow for the things they need. Because we are using our members money we look at things differently. Of course it is important to look at the APR to compare the rates but look behind the headline rates and the terms and conditions before making a decison. Here is what we say to our members when looking at Car Finance :
- Have you worked out what you can comfortably afford to pay ? Take into account that life doesn’t always go to plan and you might need some extra money at different times of the year. Our tip is to set yourself a savings plan every week or month and take that out of any available money that you have for car repayments when working out your budget.
- Be very clear on he type of finance that you would like to use for your car purchase:
- Personal Loan – The simplest form, where you borrow to purchase the car and you own the car straight away. No matter what happens in the future the car is yours.
- Hire Purchase– Lots of different deals out there with varying headline rates. Basically the loan is secured against the car and if repayments aren’t made the car could be re-possessed
- Personal Contract Plan– Probably the most complicated of all the options but very a popular form of finance since their introduction into the Irish market. The simplest explanation of a PCP is that it is a secured loan against the car where part of the overall repayment is put to the end of the agreement which is the dealer sets a guaranteed minimum value (Subject to terms and conditions) at the end of the term. Customers pay a smaller monthly repayment but have the prospect of a large balloon payment at the end of the agreement. The ownership of the car can only pass when the following:
- Pay the balloon payment with any savings you have
- Take the car back to the Dealer who will honor the GMV (subject to T&C’s such as mileage & damage) and may be used as a deposit against a new car
- Take out a term loan to pay off the outstanding balance on the car.
- Other than the rate received do you receive anything else off the Bank or Finance provider
- With Gurranabraher Credit Union we pay a portion of the interest you have paid, back to you in cash after our AGM (in 2018 that was 12.5% of all the interest paid)
- Any surplus that Gurranabraher Credit Union makes goes back to the Credit Union to be delivered back in Dividends to our members and community sponsorship.
- Loan Insurance and no direct cost to you
Our members have trusted Gurranabraher Credit Union to arranged their finance when changing their car for over 50 years so why not just check us out with a simple, no fuss Car Loan where you do really own your new car !!!