Know What Can Be Hidden In The Small Print

The projection for new car sales continues to increase and all the institutions aggressively compete for your business with many special offers but what are the real costs associated with different institutions and how does a credit union car loan differ.
We will try to answer some of the questions we are asked every day in the following article.

Ownership - Who owns the car?

With Finance companies: Most car finance packages are hire purchase agreements, which means you pay to hire the car with a view to owning it when you make the last payment (known as a balloon payment ).

With the Credit Union: With a credit union loan you own the car from day one.

Ending the agreement

Finance companies: If you want to end a hire purchase agreement because you no longer want to keep the car you have to pay half the hire purchase agreement less the total of your repayments to date. However if you sign the voluntary surrender form you will be liable to pay the remaining balance of the agreement.

Credit Union: With a credit union loan you pay only the balance and the interest for the week allowing you the flexibility of changing the loan at any time without any additional costs.

Interest rates

Finance companies: Many finance companies have a different rate structure depending on the amount borrowed or whether it is a new or second hand car.

Credit Union: With the credit union there is one rate for all our members.

Charges

Finance companies: With hire purchase agreements there is a documentation fee between €63 and €75 Along with an additional completion fee of between €1 and €75.

Credit Union: With a credit union loan there are no fees.

Loan Protection Insurance

Finance companies: Where insurance is required it is an additional cost with finance companies ranging between €36 and €70.

Credit Union: With a credit union the insurance is free.

Interest Rebate

Credit Union: The credit union is the only organization that returns part of the interest paid by means of an interest rebate thereby reducing the overall costs.

Cash Buyer

Credit Union: By having your finance pre approved you have the flexibility of a cash buyer enabling you to negotiate a better deal on the car along with calculating what you can really afford.

Insurance & Tax

Credit Union: An additional loan for insurance and tax can be provided or added to the car loan.

VAT

Credit Union: For businesses vat can be reclaimed on the full amount and not monthly increasing cash flow or reducing the borrowing at a faster pace and thereby reducing your overall interest payments.

Community

Credit Union: When you borrow from the credit union you involve your community by using the community bank that will put this money back into the community.

I hope I have shown what distinguishes us from other finance companies but I believe the real difference is that Skibbereen credit union lives by its values putting people before profit and the service we provide is the real difference.