More than half of all new cars sold in 2016 were acquired under finance agreements such as personal contract plans (PCP) and hire purchase deals.
The data comes as the Competition and Consumer Protection Commission (CCPC) confirmed, this week, it is to examine the personal contract plan (PCP) car finance market.
It is estimated thousands of people are availing of these contracts.
The figures reveal finance arrangements have skyrocketed by 139% over the past three years.
According to Motorcheck.ie, in 2014 there were 30,943 new vehicles sold under finance whereas that increased to 73,979 new vehicles sold on finance in 2016.
Figures for the first six months of 2017 show a 4% increase in cars being sold on finance
The statistics do not distinguish between hire purchase and PCP agreements but clearly show a sharp increase in car finance arrangements, in general, over the past three years.
For example, in 2014, a little under one third (32%) of all new vehicles sold were financed.
However, by 2016, the figure had risen to 51% of all new vehicles. This has risen again slightly, this year, to the end of June where 54% of vehicles sold have been financed.
Managing director of Motoercheck.ie Michael Rochford said there had been a lot of unfair commentary on PCP deals in recent weeks.
“There has been a lot of scaremongering recently regarding PCP finance. A lot of it is unjustified, and I’m sure the industry will welcome the study undertaken by the CCPC into PCP.
“Anything that will help the consumer to fully understand PCP as a finance product will also help to strengthen the confidence of those customers who are suitable for this type of product,” he said.
“There is no doubt that PCP won’t suit everybody, but it’s actually a very good product for people with a predictable budget who want to change their car every three to five years. It has been around for many years in the US and the UK and is the primary source of car finance in those markets. The key for any consumer is to ensure you understand all of the terms and conditions.”
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