You have a few options here, and if you want a fuller explanation then I’d suggest you should take a look at http://www.completecar.ie/finance. But the basic three options are PCP, Hire Purchase or personal loan. On a PCP you pay a deposit (usually between 10 per cent and 30 per cent) and then finance the balance between the deposit and the guaranteed minimum future value, which is a residual value that the finance company will agree to pay for the car at the end of the term. That means your monthly payments can be kept temptingly low, but it does mean you will have to face a ‘bubble payment’ usually of around €5,000 at the end. You can either hand back the car, to cover the payment; roll the plan over into a new car; or make the payment and keep the car. Beware though – you never actually own the car, you’re leasing it and you have to stick to quite strict mileage and maintenance plans to avoid penalty payments.

 

Hire Purchase you probably already know well enough by now. Make a deposit, finance the balance. Monthly repayments and APR are usually higher than on a PCP but it’s a simpler agreement, no mileage or servicing rules and no bubble payment at the end.

 

A bank or Credit Union loan is the final and probably best overall option. It’s your money, you own the car from day one (so you have an asset whose value can be realised if you need to) and you’re not tying yourself into one lender, dealer or manufacturer.