Credit unions providing second-hand car loans in new scheme
Published 02/02/2011 | 05:00
CREDIT unions have linked up with car dealers to offer loans to buyers of second-hand cars.
There are more than 400 credit unions and they have around €6bn to lend out, the people behind the new initiative said yesterday.
The move could prove a huge boom for credit unions and get over the problem many consumers are encountering getting funding to buy a used car.
Director general of the Society of the Irish Motor Industry (SIMI) Alan Nolan said there were a number of lenders prepared to finance new car sales, but funding for second-hand cars was a big problem.
The new initiative will see people interested in buying a car from a motor dealer being pointed towards a website run by credit unions.
Once someone registers on the the Direct Access to Credit Unions (DACU) website their nearest credit union will commit to contacting them the next day, according to Sean Staunton of Balbriggan Credit Union.
Mr Staunton, who came up with the idea for the new funding scheme, said typical lending rates were between 6pc and 12pc.
Many credit unions have special discounts for motor loans.
Anyone availing of the deal who is not already a member of a credit union would have to join one.
Those applying for finance would have their income checked out, with their credit record examined in the Irish Credit Bureau to ensure they can meet the repayments.
Mr Staunton said the size of loans would typically be between €10,000 and €15,000.
He said that most credit unions no longer required people to save at the same time as repaying a loan.
Chris Fleming, who is chairman of the SIMI committee that represents 600 used car dealers, said his members were losing car sales because of the lack of availability of finance.