Drive a bargain with your credit union

The old adage, “If it sounds too good to be true, it probably is” should be front and centre of customers' minds when buying a new car.

Link Credit Union is warning members to research various financial options available to them to fund their purchase and not to make a hasty decision.

The Head of Lending, Ailbhe Curtis, points out that some car finance deals such as Personal Contract Plans (PCPs) can make the deal look attractive at first glance but they often hide a range of additional costs and inflexible terms that could compromise your financial stability in the long run.

"It’s crucial to understand what is really involved before committing to a new contract," she advises.

When your PCP reaches its conclusion, you will face some important decisions.

Many people simply opt to roll over their existing PCP into a new car finance deal, while others choose to make a final balloon payment in order to buy out of the contract. You can, of course, hand back the keys, but you would have nothing to show for your investment in that case.

"If you’re considering rolling over your PCP, be sure to read the fine print, you might find that it’s time to burst that balloon and make a more stable financial choice," said Ailbhe, adding that your local credit union should be able to help in that regard.

While the low monthly payments with PCP seem attractive, she warns that they are offset by the balloon payment required at the end of the contract. The value of the car at that time is also impacted by factors such as mileage.

In contrast, Ailbhe points out that a personal car loan from a credit union offers a more flexible and stable path to financial security. With a credit union loan, you own the car outright from the start.

“This means that you can drive as much as you like, and even sell the car at any time, without needing approval from a third-party finance provider,” she explained.

Furthermore, Link Credit Union’s personal loans offer greater flexibility if your financial circumstances change. Of course, loans are subject to approval and terms and conditions apply but the credit union will always help its members to get back on track.

"If you experience difficulty making payments, you can work directly with the credit union to adjust your repayment schedule, offering peace of mind that your financial stability is always a priority," said Ailbhe.

Additionally, should you find yourself in a position to pay off your loan early, there are no hidden fees or complicated rescheduling processes with your credit union – just the straightforward benefit of freeing yourself from debt sooner.

Ultimately, Ailbhe says, choosing a credit union loan for your car purchase gives you more control over the long-term stability of your finances.

"You won’t be tied to restrictive terms or balloon payments, and you’ll enjoy the stability of full ownership from day one," she said.

Link Credit Union, which is regulated by the Central Bank of Ireland, also offers free Loan Protection Insurance for its borrowing members. This means, should you die, your outstanding loan balance dies with you, the loan is paid in full. This is a free benefit for eligible members, subject to terms and conditions.