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The quick and easy way to suss out your car loan

31 October 2019

Buying your next car should be full of decisions that you really enjoy making. Which colour best complements my driveway? Is it time to step up to a saloon? Should I stretch my budget for that convertible? Alright, the last one's probably not such a toughie when it comes to Irish weather.

What shouldn’t be drawn out is the approval process for your car loan. 

So, let’s make car loans as easy to digest as possible. Here are the big things you need to know before you give your purchase the green light…

What's your budget?

To reach the actual cost of your new car, you’ve a fair bit to consider. First of all, decide what kind of car you want, and whether you can save on a trade-in. Then, assess if you have savings you can use to secure against your loan and get yourself a better interest rate.

There are, of course, running costs to cover. Insurance, tax, servicing, fuel and fuel efficiency will vary from car to car, and need estimating. If you're looking at an older car, parts may need replacing. Take a step back and consider the whole picture to see how it will impact your monthly spending.

The Competition and Consumer Protection Commission (CCPC) has a handy budget planner that will help you deal with these costs more effectively. How long do you want to be paying? If you can afford it, it’s recommended that you pay your car off before you want to sell it on. Once you know your dream car can be made a reality, you have a number of finance options.

PCP or not PCP? That is the question

Personal Contract Plans (PCPs) are all the rage in recent years1, with people attracted by very low (or even zero!) interest rates. It’s worth remembering that, although they may seem more appealing than traditional loans, the ownership of the car only passes over to you on the final day.

PCPs typically involve an upfront deposit of between 10-30%, with repayments then lasting around three years.

There will then be another balloon payment to end the agreement. This is called the Guaranteed Minimum Future Value (GMFV) and the figure is set out at the start2.

However, one recent study showed “few people” were ready for this and many opt to “roll-over” the loan rather than paying it. This means trading the car in for a new one and starting the loan all over again. What’s more, there are often terms put in place that can affect the car’s final value, such as yearly mileage restrictions.

They are similar to a hire purchase, which is another option which sees your garage arrange your finance. The finance company rents the car to you while you make repayments over a number of years. You own the car once the final repayment is made.

Personal loans

Heading to your local credit union was the typical plan for car finance, but there are other loan options available. One major benefit of a personal loan vs PCP is that you get to own the car while paying off the loan. Aside from it being nice to properly call it your own, it also means you can sell the car if your financial circumstances change.

How can you fast-track your loan?

Permanent tsb prides itself on making the process as quick and manageable as possible.

That starts with giving you a no-nonsense breakdown of repayments, based on your own preferences. Our car loan calculator simply asks “how much would you like to borrow?” or “how much would you like to pay?”

Taking into account the year of registration and loan term, you’ll immediately see the cost of monthly repayments, overall cost of credit, total amount repayable, interest rate and the Annual Representative Rate (APR). Basically, everything to help you make the right decision.

Some other benefits of this type of financing include:

  • 100% finance available with no deposit required
  • Terms up to 5 years available 
  • You own your car from the start
  • No arrangement or documentation fees

If you’re a permanent tsb customer, check out how to apply online and some of the additional benefits you could enjoy from going that route.  If you’re a non customer, you can of course apply for a loan too, you’ll find all the details here. Enjoy the journey!

Lending criteria, terms and conditions apply. permanent tsb p.l.c. is regulated by the Central Bank of Ireland.

The content of this blog does not constitute advice and is for general information purposes only. Readers should always seek professional advice before relying on anything stated in the blog. Some of the links above bring you to external websites. Your use of an external website is subject to the terms of that site.


  1. Competition and Consumer Protection Commission (CCPC)
  2. Economic and Social Research Institute (ESRI)


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