Best place to get a car loan?

flashcash5

Hi all,

Where is the best place to get a car loan these days? Or mabye just any loan at that. Just wondering what ye guys went for and what ye thought ..

Eoin

The Business / Economy / Finance forum may be a better place to ask, but for what it's worth, a large part of it depends on how long the loan is for.

You will probably hear a lot of people advise against a Hire Purchase loan, but if you plan to keep the car for the length of the loan, and don't mind that you can't pay extra money into the loan then it actually tends to be cheaper than a personal loan.

However; with a HP loan, the car can be re-possessed by the finance company in the event of defaulted payments (until you have paid a certain percentage of the loan back - 75% or so?). If you want to sell the car before you have paid everything back, then technically you have to buy out the rest of the loan with them before you do so. You may then incur penalties.

Credit Unions tend to offer competitive rates, but with a lot of them you have to have a certain amount in your account with them in the first place.

I just went with a personal loan from my own bank as it was the easiest process, but I really should have shopped around more.

bennyx_o

I've got a HP loan for my car. As eoin_s said, it's grand if you're going to keep the car foer the duration of the loan.

Ernie Ball

Tesco are still doing loans at 7.5% fixed, which is pretty low. Given that interest rate rises are on the cards, I'd say this is as good as you'll get currently.

Eoin

Ernie Ball wrote:

Tesco are still doing loans at 7.5% fixed, which is pretty low. Given that interest rate rises are on the cards, I'd say this is as good as you'll get currently.

That's a very good APR - you'd probably be doing well to get that rate on a variable loan. BOI rates seem to be between 8 and 9%

VroomVroom

Credit Union is generally the cheapest I think, and you have the option to pay it off faster if you suddenly 'find' a big pile of cash!

I'd talk to your bank though, I bought a car in January, spoke to bank to make sure I'd be able to get something, went off and found a car, the dealer offered me a HP deal. I took the paperwork from the dealer and went off to the bank with it to compare numbers and it turned out that the overall 'Cost of Finance' over 4 years was cheaper from Nissan than my bank which I've been a customer of for 8 years.

Pointed this out to Bank Manager (without showing any proof of what Nissan had offered me) and he made a call, instantly dropped the interest rate they were charging for the loan, so I went with my own bank.

Until then, I had no idea that you could 'haggle' over repayments with a bank, I just assumed they were set in stone. I'm with pTSB.

smash

You can bargain with the garage if you get it through them, I got a 6% loan from GE through a dealer I bought a car off before.

crosstownk

I'd go for the credit union option too. But you'll probably need some savings history with them at the very least - if the amount you need to borrow is large then you may need some previous loan history also.

If the credit union is not an option for you then you should look into the 6% loan from GE that steve06 mentioned in post no.7. I work in a leasing company and we're using 6% too.

Eoin

I forgot to mention that some of the HP deals have "paperwork fees" attached to them, maybe €100 at both ends of the contract - you may be able to get these waived though, as it's a buyers' market.

bazz26

Yes most credit unions will only allow you to borrow up to 3 times what you have saved with them. Some advantages are that they are more flexible with the payments and the interest amount reduces over the term of the loan.

Yes it is a buyers market and you can get very competitive rates from the banks directly as well as through the garage you are buying the car from.

doggy

Some good info here:

http://www.askaboutmoney.com/showthread.php?t=22787

ninty9er

AFAIK the interest is reducing balance with nearly all lenders.

The Credit union is by no means the cheapest. I opted for it cos they're flexible and i'm a student with little guarantee of income into the future bu the effective rate is over 10% per annum 9.75 APR

Owen

Anyone who compares loans by APR needs their heads examined. It's a great way to throw away money. APR is a figure banks pull out of their collective asses, and is based on interest, setup fees, and other factors. For example, two banks with the same APRs can have different monthly payments.

primafinance.ie will compare rates across the country. You can organise the comparisson by either APR, or by cost per thousand. Now, ask a bank/car franchise or credit union the cost per thousand and they'll cringe. Because this is the real test of how good a deal you've managed to get.

FWIW, they're all out to make money from you. Banks especially. At least a car franchise is making money from the car itself, they may choose after a lot of haggling from your part to belt out the finance at cost to shift the unit. The only motivation a bank has is to make money from the finance itself. Case in point, the sister works for AIB, and I was able to beat her staff rate using the in house finance at the Dealership I work in.

Haggle, haggle, haggle!

flashcash5

Thanks a million all, really appreaciated.
I will probably be looking for a max of €6,000 so according to your info, i'll rule out:
Teso as a loan under €8,00 is 11.9% APR
Credit union because i have no account with them and can't afford to open an account and put a nice bit in to get a loan with them.
I have an AIB account with a VISA & existing loan with them but it seems i can go lower elsewhere.

So, i think i've narrowed it down to:
- Checking with the in house finance at the garage (if i buy from one)
- Enquiring with GE Money
- Permanent TSB

But it seems that pTSB is a HP loan. Do i definately not have the option to pay it off faster if i find a wad of cash under my matress?
I aslo have a bank of scotland account from years ago. Any feedback on this from anyone?

Thanks again!

babybundy

credit union is about the best that i found

flashcash5

flashcash5 wrote:

I aslo have a bank of scotland account from years ago. Any feedback on this from anyone?

Bank of Scotland are doing a special offer on a loan at 7.2% APR just for the record if anyone is interested.
http://www.bankofscotland.ie/index.jsp?1nID=93&pID=94&nID=105

kluivert

TESCO beats them all

flashcash5

I hear Teso loan under €8,00 is 11.9% APR
You could go to ptsb for 7.9 or bos for 7.2 - don't see how it would be better in that case though

Darando

Thought Tesco loans were all 7.5% fixed for all amount from €2,500 to €30,000. No exit fees etc.(does this mean pay off lump some when you want???)

http://www.tesco.ie/finance/personalloans/index.html

Unless I failed to see something else. A phone to them would confirm it.

ninty9er

Get a mortgage topup. 4-5 %