Volume and value of car loans in Ireland hit record highs  

BPFI says more than 16,000 car loans were drawn down in the first quarter as CSO data shows new and second-hand car sales grew growing in that period 

The value of the average car loan during the first three months of the year stood at was €12,901. 

The volume and value of car loans have reached record highs during the first three months of the year with over 16,000 drawn down, new data shows.

According to figures from the Banking and Payments Federation Ireland (BPFI) between January and March 49,770 personal loans were drawn down with a combined value of €551m.

Car loans accounted for 16,089 of these personal loans — an increase of 6.1% year-on-year — worth a combined €208m, up 10.7%.

The average car loan was €12,901 during the three month period.

Head of sector research and analysis at the BPFI Anthony O’Brien said the increase in volume and value of car loans “likely reflects the sustained growth in new car sales” with figures from the Central Statistics Office showing a 9% increase in new cars licenced and a 25% increase in second-hand cars licensed during the start of the year.

However, since this data was compiled, the number of new cars licensed has slowed significantly. In June, the number of new private cars licensed was down 37% compared to the same period last year while the number of second-hand cars registered was up 27%.

During the first six months of the year, the number of new cars licenced was up just 3%.

In addition to car loans, there were 13,009 home improvement loans drawn down during this period, a decrease of 6.7%. However, the total value of these loans actually increased by 12.9% to €147m.

The “other” category accounted for 20,672 personal loans drawn down with a total value of €177m. This category includes loans for education, holidays and special occasions such as weddings.

The data also showed the value of “green loans” increased 38% to €27.1m compared to last year while the number of green loans also jumped by 38.3% to 1,209.

The average green loan was more than twice the value of an average personal loan at €22,432 compared with the average for all loans at €11,062.

Mr O’Brien said they expect the Government’s recently launched Home Energy Upgrade Loan Scheme to provide a “further boost to green loan demand" by helping to reduce the financial barriers to home energy upgrades. 

These loans are supported by a grant from the Sustainable Energy Authority of Ireland. The retrofit would have to improve a home’s energy performance by at least 20%.

Green loans can be used to buy an electric or plug-in hybrid car or to upgrade the energy efficiency of a home.