Isn’t Financing A Car Through PCP Cheaper ?

This is a question we are asked daily and we understand how on the surface, PCP finance looks like such a super deal. It possibly is…… for the first three years. However, the numerous concerns being raised around PCP is why earlier this year the Competition and Consumer Protection Commission (CCPC) commenced a study into this type of car finance. It is becoming very clear that there is increasing fear that consumers are not up to speed on the potential pitfalls.

By deferring a significant proportion of the vehicle’s purchase price to the end of the PCP term – typically three years –  the monthly payments are set at what seem like attractive levels.

Then there is the guaranteed minimum future value ( GMFV), this is the future value that the garage agrees is the amount you will pay at the end of the life of the contract if you want to own the car outright….the balloon payment.   This can be fine if you have the cash to make this payment or you can borrow at an affordable level. However, this GMFV cannot be accurately predicted as there are many factors that will influence the second-hand car market in three years’ time including, how many people like you, will be exiting their PCP at the same time with the same make and model car as yours, thus impacting on your potential financial liability.

It is also worth noting that in many cases, PCP limits the mileage you can drive in any year, has restrictions around how the car is maintained and other important points that are sometimes overlooked in exchange for the excitement of owning what seems like a very affordable new car.

PCP offers a beneficial outcome for the motor industry because when you commit to a PCP agreement, you are not buying a car you are acquiring a financial obligation with a potentially uncertain ending.

In complete contrast, a car loan with Carlow Credit Union is priced at a very competitive interest rate, you have access to a market of second hand and new cars and from day one you own that car outright. No hidden costs, no limitations, no balloon payments.

For Example, based on the interest rates as of today’s date, a car loan for €20,000 over a 5-year term will cost you €396 per month in repayments, for a car that you will own outright from day one.

Why don’t you speak to our team now and see how they help you with buying your new car ( without the PCP risks) 059 913 1994 or email us via

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