Benefits of a Credit Union Car Loan compared to a hire purchase agreement

It is that time of year again where some members may be thinking about buying a new car. Naas Credit Union offers one the very best Car loan rates available, coupled with the other benefits of a Credit Union loan. When a dealer offers you a finance deal on the forecourt it is important to compare like with like.

Here are the main differences between a Credit Union car loan and a hire purchase agreement

• You own your car with a Credit Union car loan as soon as you hand over the money to the garage. With hire purchase you do not own the car until the last cent is paid on the agreement.
• If you have difficulties making your repayments you can talk to the Credit Union, we will not reposess the car or make you sell the car. On a hire purchase agreement if you fail to keep the repayments up to date your car can be repossessed at any time.
• With a Credit Union loan you have more options if you encounter difficulties by being able to sell the car or trade down. With a hire purchase agreement you do not have this flexibility.
• Credit Unions do not charge documentation, completion or any other fess on your loan. Under a hire purchase agreement documentation, completion and other fees are usually charged.
• Credit Union loans benefit from free insurance and are cleared in full in the event of your death or permanent disability. By contrast, similar insurances must be purchased under hire purchase agreements, thereby adding to the cost.
• With a hire purchase deal the interest is front loaded which means when settling a loan, the borrower will not save on interest, while a bank loan usually has a penalty interest for early repayment. Naas Credit Union on the other hand charges interest on a daily basis so you will save on interest costs by clearing the loan early, in part or in full.
• Sometimes with a hire purchase deal a balloon repayment is included at the end to bring down the regular repayment. This has a big impact on the cost of the loan for the borrower, as well as a very large last repayment.
• Watch the term, often a hire purchase agreement is over the term plus one month (sometimes this even stretches to plus three months). This term is not always clear and has the effect of seeming to reduce repayments while increasing the cost of the loan.

Almost a third of all car buyers secure a loan from their Credit Union, making it one of the most significant sources of motor lending finance.

Naas Credit Union has one of the best car loan rates available as well as having money €€€ ready and available to lend. View our rate here ...

We are firmly "Open for business". Naas Credit Union is an independent and separate legal entity, providing financial services to Naas and the surrounding areas.Despite recent media stories about loan restrictions, I want to reassure members that Naas Credit Unions ability to lend money is not restricted in any way. In fact, we have significant money available and are working to support our members borrowing needs. Of course, our responsibility to our savers is very important and so we must be cautious in making a loan decision.

We did some more research on the differences between a Credit Union loan and a hire purchase agreement. In doing so we realised there were more advantages to the Credit Union loan compared to our first blog post.