Buying a car is often regarded as the second most important purchasing decision in our lives, after buying a home, so it is important to spend time choosing the right type of finance and understand the conditions attached to that finance. Most car dealers offer hire purchase agreements as their car finance loans. Hire purchase differs from a credit union loan in that you do not own your car until you make the final repayment. With a credit union loan, you own your car from day one.
Dealers offer hire purchase agreements through finance companies, who basically rent the car to you in return for a regular repayment over a number of years. Once the last repayment is made, the ownership of the car passes from the finance company to you.
Hire purchase agreements are one of the most inflexible forms of car finance. The interest rate is fixed for the term of the agreement and all the interest is added on from day one.
Typical fees and costs on a hire purchase agreement
The fees and charges on hire purchase agreements can vary, but may include:
• Documentation fees – a fee for setting up the hire purchase agreement
• Interest surcharge for missed repayments – an additional interest charge on any missed repayments
• Penalty fees – for missed or late payments, in addition to interest surcharge
• Completion fee – to facilitate transfer of ownership of the car to you
• Repossession charge – a fee for repossessing the car
• Rescheduling charge – a fee for changing the loan terms
• Balloon payment – a large repayment at the end of some hire purchase agreements
Skibbereen Credit Union Car Loan
• You own your car from day one
• You can sell your car at any time
• You can borrow for the full amount of the car, or borrow more to cover insurance, tax, etc
• There are no hidden fees, admin charges, transaction charges, set up costs or balloon payments
• Repayments are calculated on your reducing balance, so you pay less interest with each repayment
• You can pay off your loan early without any fees or charges
• Increased repayments will reduce your interest repayments
• If you need to reschedule your loan, we can work with you to adjust your repayments
• Your loan is insured at no direct cost to you, thereby protecting your family
With the 162 car market about to kick off, Skibbereen Credit Union offers a New Car Loan rate of 5.99% (6.2%APR), one of the cheapest rates in the marketplace to own your own car. We encourage you to compare our rates to what car dealers offer. You’ll find our rates and terms very competitive. It’s easy to apply: call into our office, talk to us over the phone, or complete your application online at www.skibbereencu.ie. Happy driving!
