Almost half of Irish motorists intend on using car financing to purchase their next car

Carzone examines attitudes towards car finance options among consumers

Key findings

• Nearly half (47%) of Irish motorists intend on using car finance to purchase their next car
• 42% of drivers under the age of 25 do not have a good understanding of car finance
• 30% of motorists feel that monthly cost is the most important factor when considering their next car
• Car finance deterrents include not owning the car outright (39%) and commitment to monthly payments (25%)

Almost half (47%) of motorists intend on using car finance to purchase their next car, however some still do not feel confident when it comes to understanding car finance. This is especially true for younger drivers, with 42% of drivers between the ages of 18-24 admitting they don’t have a good understanding of the finance options when purchasing a car.

Research carried out by Carzone, Ireland’s trusted motoring marketplace, found that the perceived barriers to using car finance include, not owning the car outright (39%), being uncertain about the deposit and lump sum required at the end of a PCP agreement (30%) and reservations about committing monthly payments (25%).

A credit union loan is the first port of call for 61% of respondents when looking at financing a car, with a third (33%) preferring a personal bank loan. Other preferences by car buyers were hire purchase via dealership (27%) and PCP (24%).

When it comes to finance considerations when buying their next car, almost half or respondent’s main concern was the total cost of the vehicle (49%), followed by monthly cost (30%), APR or interest rate (11%), loan duration term (6%) and total deposit (6%).

While the majority of motorists in Ireland prefer to arrange car finance through a dealership (43%), an online form was also considered as an option at 40%.

Commenting on the latest report, Karl Connolly, Audience Manager Carzone said:

“This research investigates the concerns of Irish motorists when it comes to using car finance to purchase their next car. It is clear, especially in younger drivers, that a lot of potential car buyers don’t fully understand how car finance works and what the best options might be for them as individuals.  The data tells us that a greater effort must be made to ensure that Irish drivers have a better knowledge of what options are available to them and how to avail of these services,  in order to better serve those looking to buy, sell and trade.”

This  research was compiled by an in-depth survey of over 2,000 people in Ireland in October 2020.