Motoring Reports

Carzone guide to finance

November 2016

Although a massive 42 per cent of our survey respondents told us that they used their own savings to buy their current car, there's an undeniable shift towards using all types of car finance. Some 21 per cent used PCP, 16 per cent used the Credit Union and another 13 per cent took out a bank loan. 

So, what is PCP?
PCP stands for Personal Contract Plan. First up, the buyer pays a deposit (or covers it with a trade-in) and then a monthly fee for a set number of years (usually three). Finally, when that time is up, they decide between paying a lump sum to own the car, giving the car back with no further payments, or using value remaining in the car to cover a deposit on another new car to start the cycle again. There's lots of fine print involved, but that's what most of them boil down to.

What are the pros and cons?
The pros include a shiny new car every three years, minimal maintenance costs and seemingly low monthly payments. The cons include the fact you don't own the car, there are usually limitations on mileage and condition and, once in the cycle, it's difficult to get out and start again from scratch.

Other options?
Good old Hire Purchase is still available. Rates and repayments are higher than PCP, but you own the car at the end. Meanwhile, Credit Union and other bank loans allow the buyer to own the car from the start.

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Report Highlights

Carzone guide to finance

Carzone guide to finance

Although a massive 42 per cent of our survey respondents told us that they used their own savings to buy their current car, there's an undeniable shift towards using all types of car finance....

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Money Matters

Money Matters

Monthly car running costs vary from person to person, though our data reveals that, in general, men spend more on motoring than their female counterparts do....

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Selling a Car

Selling a Car

Most motorists that intend to sell their car in the coming year will use it as a trade-in, as they feel comfortable with the process and there's no potential delay in waiting for a private buyer....

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Buying a Car

Buying a Car

Data from Cartell.ie clearly shows that the used car market is buoyant, with transactions comfortably exceeding one million – against 976,025 for the same period in 2015. That's an encouraging gain of 7%....

View More
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