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Looking to finance a car? These are your key options
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Published in Business and Finance on Tuesday, November 4th 2025 at 6:16 GMT by The Irish News- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Key Ways to Finance a Car in Ireland – A Comprehensive Guide
When the time comes to buy a car, most people do not have the full purchase price in hand. Fortunately, there are several practical financing routes that can help spread the cost over time. Below is a rundown of the main options discussed in the IrishNews.com feature “Looking to finance a car? These are your key options,” plus extra information gathered from the supplementary links included in the article.
1. Personal Loans
A personal loan is a straightforward way to fund a car purchase. Banks, credit unions and online lenders offer unsecured loans that can be used for any purpose, including buying a vehicle. Typical loan terms range from 12 to 60 months, with interest rates (APR) usually between 4 % and 10 % for borrowers with good credit. The article stresses the importance of comparing offers because rates vary by lender and are influenced by your credit score, income and debt‑to‑income ratio.
Follow‑up link – “Personal Loans and Car Finance”:
The linked guide explains that lenders look for a stable income, a debt‑to‑income ratio below 35 %, and a credit score of 650 or higher. It also notes that a higher down payment (usually 10 %–20 %) reduces the loan amount and, consequently, the monthly payment and total interest paid.
2. Hire Purchase (HP)
Hire purchase is a popular model for car buyers who want to own the vehicle at the end of the term. Under an HP agreement, you pay a deposit (often 10 %–20 % of the car’s price) followed by fixed monthly payments over a set period, typically 36 to 48 months. Once all installments are paid, ownership transfers to you.
The article highlights that HP contracts usually have a “residual” value clause that sets the final payment, which can be negotiated. Importantly, the total cost of an HP deal can be higher than a personal loan due to built‑in dealer fees and the financing charges bundled into the monthly payments.
Follow‑up link – “Hire Purchase Explained”:
This resource details how HP financing is calculated: the principal amount is divided over the term, and interest is applied to the outstanding balance each month. It also warns that early repayment fees can apply if you wish to pay off the HP before the scheduled term.
3. Lease
Leasing offers lower monthly payments by focusing on vehicle usage rather than ownership. You pay a fixed monthly fee for a defined period (usually 24 to 36 months). At the end of the lease, you either return the car, pay a residual value to buy it, or negotiate a new lease.
The article notes that leases are attractive for drivers who prefer newer models every few years or who want predictable monthly budgets without the responsibilities of maintenance. However, lease contracts often come with mileage limits; exceeding them can incur costly penalties.
Follow‑up link – “Lease Options and Terms”:
The linked page clarifies that lease agreements typically require a lower deposit (sometimes just a few hundred euros) and that the monthly cost can be 10 %–20 % lower than HP payments. It also explains how residual values are determined by the vehicle’s projected depreciation.
4. Dealership‑Provided Financing
Many car dealers collaborate with banks and credit unions to offer in‑house financing. These deals can include promotional rates such as zero‑percent APR for a limited period or “no‑deposit” offers. The article cautions that while dealer financing can be convenient, the interest rates may be higher than those offered by independent lenders, and the deals often come with additional fees.
Follow‑up link – “Manufacturer Finance Offers”:
The guide lists typical dealer promotions, such as 12 % off the sticker price or 0 % APR for 12 months. It stresses that buyers should scrutinise the terms, especially the length of the promotional period and any hidden costs, before signing.
5. Credit Cards
Paying for a car with a credit card is rarely advisable due to the high interest rates (often above 20 % APR). Some people use a credit card to cover a deposit or a small part of the purchase, but it should be paid back quickly to avoid large interest charges.
Follow‑up link – “Credit Card Payment Guide”:
This resource outlines that credit card issuers typically consider a vehicle purchase as a large purchase, triggering a higher interest rate. It also explains that some cards offer 0 % financing on large purchases for a limited time, but the terms are usually short (3–6 months) and the interest kicks in immediately after.
6. Buy‑Now‑Pay‑Later (BNPL)
BNPL services like Klarna, Afterpay, and ZipPay allow buyers to pay in installments over a short period (typically 3–6 months). These services can be attractive for small purchases or for drivers who wish to spread out the cost of a high‑value car without taking a full loan. The article notes that BNPL can lead to overspending if not managed carefully.
Follow‑up link – “BNPL Services and Fees”:
The linked page clarifies that BNPL providers charge a convenience fee (usually 3–5 % of the purchase price) and may impose late‑payment penalties. It also advises users to read the fine print regarding the total cost when the service includes financing charges.
7. Saving Up for a Down Payment
Although not a financing method per se, building a sizable down payment can dramatically reduce the amount you need to borrow and lower the interest paid over the life of the loan. The article recommends setting up a dedicated savings account, using a high‑interest savings product, or automating monthly transfers to accelerate the process.
Follow‑up link – “High‑Interest Savings Accounts”:
This resource lists current interest rates for Irish savings accounts, noting that some banks offer 1.5 % to 2.5 % APY for new customers. It also includes tips on avoiding fees and maximizing interest by maintaining a minimum balance.
Making the Right Choice
The IrishNews.com article concludes that the best financing route depends on several factors: credit score, desired monthly payment, how long you plan to keep the vehicle, and whether you value ownership or flexibility. It encourages readers to:
- Check Credit Score – A higher score unlocks lower interest rates.
- Compare Offers – Use comparison sites or financial calculators to estimate total costs.
- Read Contract Details – Pay close attention to fees, early‑repayment penalties, and mileage restrictions.
- Consider Total Cost of Ownership – Insurance, fuel, maintenance, and depreciation all impact the real cost of owning a car.
- Avoid Over‑Financing – Borrow only what is needed to keep monthly payments manageable.
With these guidelines and the additional context from the linked resources, readers can confidently navigate the complex landscape of car financing and select the option that best fits their budget and driving needs.
Read the Full The Irish News Article at:
[ https://www.irishnews.com/life/looking-to-finance-a-car-these-are-your-key-options-NEGCJXSSP5ONBLRZUS5KHN3524/ ]
