Price inflation sees value of car loans surge

Total value of personal loan drawdowns reached a new high of €552m between July and September last year

BPFI chief executive Brian Hayes said the average car loan value was up by €1,268 to €12,599, 'likely reflecting higher car prices and growth in luxury and e-vehicles”

The value of car loans surged by nearly 40% between July and September last year, driven by higher prices as well as growth in electric vehicle and luxury sales, new data from the Banking and Payments Federation Ireland (BPFI) shows.

Overall, the total value of personal loan drawdowns reached a new high of €552m during those three months. 

The figure shows that while growth was seen in loans for home improvement, holidays and other special occasions all increased, loans for car purchases grew the most by 39.6% to €189m. The number of car loans issued rose by 25.5% to 14,994.

BPFI chief executive Brian Hayes said the average car loan value was up by €1,268 to €12,599, “likely reflecting higher car prices and growth in luxury and e-vehicles”. 

Mr Hayes added these were the “highest quarter three car loan volumes and values recorded to date, due in part to the continued growth in new car sales, especially electric cars, which accounted for 19% of new cars licensed for the first time in 2023”.

The number of home improvement loans issued rose by 13.1% year-on-year to 14,419, with a total value of €174m.

Another 23,991 loans were issued for other purposes, including education, holidays and special occasions, a rise of 7.1% year-on-year, with values also rising by 14.1% to €189m.

The number of green loans — used for home efficiency improvements and other such purchases — increased 119.3% to 1,250, with a combined value of €27m.