Car Finance Guide - How to Pay for a New or Used Car in Ireland

An Overview of the New & Used Car Market in Ireland

According to SIMI data 123,858 new cars were sold in Ireland up to the end of October 2025 - that’s up 3.4% on 2024. This upward trend in new car sales has been largely driven by a surge in EV and plug-in hybrid vehicles, with that same SIMI data showing that 23,085 new electric vehicles (EVs) have been sold so far in 2025. That’s almost a 40% increase on the same period last year.

This increased uptake on EVs has been driven by government climate targets (you can read more about those in our Green Loans Guide) and associated government incentives (more on those later), as well as some dealership offers and a wide range of finance options.

Not everyone buys new, though - whilst we don’t have hard data on used car sales in Ireland, we can say anecdotally that a significant proportion of car loans taken out by our members go towards second-hand vehicles. And data from our neighbours in the UK suggests that used car sales in Q3 2025 increased by 2.4% versus 2024 - the situation is probably similar here in Ireland.

Again, EVs are playing a significant role in the used car market. RTE reports that “the prices of used electric vehicles during the second quarter of 2025 were down 15% on where they were at the same time last year”.

This value is not going unnoticed by customers here in Dublin, many of whom are recognising that there’s never been a better time to buy a second-hand EV. According to Joathan Meade of Hutton & Mead, a car dealership in Dublin: “There's been a readjustment or realignment of price, so there's great value now in used electric cars.”

Whether you’re buying new or used, EV or petrol/diesel, privately or from a dealer, choosing the right finance option is an important step when it comes to budgeting, ownership, and long-term costs. And before you even get to the point of selecting a finance method, it’s worth considering anything that can reduce the amount you need to borrow - including trade-ins and EV incentives, both of which can significantly lower your repayment burden.

With that in mind, this guide walks through the main ways to pay for a car in Ireland and helps you understand which option may be best suited to your needs. So, here we go…

Reducing the Cost Before You Finance

Before you start comparing finance options, it’s worth looking at ways to bring down the overall cost of your car purchase. Even a small reduction in the amount you need to borrow can make a difference to your monthly repayments and the total interest you pay over time. Two of the simplest and most effective ways to do this in Ireland are through trade-ins and EV incentives.

Trade-Ins: An Easy Way to Reduce What You Need to Borrow

If you already own a car, trading it in is probably the most obvious way to lower the upfront price of your next vehicle. A trade-in works almost like a built-in deposit - reducing the overall cost before any finance is applied. Regardless of the source of finance that you end up choosing putting the value of your old car towards the new one can mean:

• A smaller loan overall
• Lower monthly repayments
• Less interest paid across the life of the loan

Trade-in values vary from dealer to dealer, so it’s worth getting more than one quote if you can, especially if you’re considering buying a new car. Car Zone have written a handy guide on trade-in tactics if you’re after some more information.

EV Incentives: Grants and Reliefs for Electric Vehicles

If you’re thinking about switching to an electric vehicle, there are a number of government supports that can significantly reduce the overall cost. It’s worth noting that these incentives apply mainly to new fully electric cars so they won’t be relevant for every buyer but they can make a real difference to the actual amount you need to pay.

The main incentive is the SEAI EV Purchase Grant which is a grant that is available on new battery-electric vehicles that meet SEAI’s eligibility criteria. The grant is applied directly at the point of purchase through the dealership, reducing the retail price before any finance is arranged. For buyers considering a new EV, it can lower the upfront cost by several thousand euro.

Electric vehicles also benefit from reduced or eliminated Vehicle Registration Tax. This relief is applied automatically and helps bring EV pricing more in line with petrol and diesel equivalents. And on top of that, EVs have some of the lowest motor tax rates in Ireland due to their zero emissions. While this doesn’t reduce the purchase price, it does lower the ongoing cost of ownership which is worth taking into account when comparing the long-term affordability of different cars.

Combined, these supports can make new EVs far more attainable. And if you’re financing the purchase through a loan or dealer product, the reduced upfront cost means you may need to borrow less or benefit from more manageable monthly repayments.

Comparing Car Finance Options in Ireland

When it comes to financing a car, it’s horses for courses. The main options available to you are PCP, hire purchase and car loans. Or you could dip into savings. Each of these options has their place, and each works slightly differently. The key is understanding which option fits your own circumstances, your budget, and the type of car you plan to buy.

In this section we will break down the main car finance options available in Ireland, outlining how they work and the types of buyers they tend to suit best. This should help you get a clearer sense of which route might be the right one for you.

Jump to:

• Using Savings
• Personal Contract Plan (PCP) 
• Hire Purchase
• Car Loan

Using Savings to Buy a Car

For many people, the simplest way to buy a car is to pay for it upfront using savings. There’s no application process, no interest, and no monthly repayments to think about. Once the money is paid, the car is yours. Unlike some of the other finance options we will discuss, you will own the car from day one with no conditions like mileage limits and no balloon payment headaches.

When is it most suitable?

Using savings may be a good fit for anyone who prefers to avoid long-term debt, or for those who are planning to combine their savings with a trade-in to bring the overall cost down even further. It’s also one of the most common choices for private sales, where dealer finance typically isn’t an option.

A Note on Buying a Car Privately

Buying privately can offer good value, but it does come with more risk than buying from a dealer. There’s usually no warranty, no formal checks, and very limited recourse if the car develops issues after the sale. Because of that, the way you pay becomes even more important. Our advice on some of the most common options:

• Credit or debit cards: this is amongst the most secure options because the payment is traceable and you may be able to rely on chargeback protections.
• PayPal: can also be an option, offering speed and a degree of buyer protection, depending on the transaction type.
• Bank transfers: commonly used but should be approached with care, as funds are very difficult to recover if the sale turns out to be fraudulent.
• Cheques and bank drafts: still used on occasion, though sellers may be reluctant to accept them due to clearance times and the risk of forgeries.
• Cash: seems simple but it isn’t always the safest option - carrying large amounts can be risky, and you don’t have much protection if something goes wrong.

When buying privately, our recommendation is to use a secure and traceable payment method wherever possible - ideally a credit or debit card, or even PayPal. Avoid sending money by bank or wire transfer to someone you don’t know, as this offers very little protection.

Other Considerations

While using savings keeps things simple, it’s worth remembering that it will reduce your financial cushion for emergencies so make sure that you can really afford your car of choice if you’re opting to pay with savings, or combine savings with another source of finance like a car loan.

Personal Contract Plan (PCP) to Buy a Car

A Personal Contract Plan (PCP) has become one of the most common ways to finance new cars in Ireland. It’s a payment plan that is designed to keep monthly repayments low by deferring a large portion of the car’s value to the end of the agreement. For many buyers, this makes a newer or higher-spec car more accessible than it might be with a traditional loan.

A PCP is made up of three parts: an upfront deposit, followed by a series of monthly repayments, and finally an optional lump-sum payment - often referred to as the “balloon payment”. At the end of the term, you can decide whether to pay the balloon and keep the car, hand the car back, or use any equity towards a new PCP agreement.

When is it Most Suitable?

PCP tends to work best for people who like to change their car regularly, as the structure naturally encourages upgrading every three years. It’s also a good fit for new car buyers who want to keep their monthly repayments as low as possible without taking on the full cost of the vehicle upfront.

Other Considerations

Before committing to a PCP, it’s important to be aware of a few conditions. Mileage limits apply, and excess mileage can incur fees at the end of the agreement. Normal wear and tear is expected, but any significant damage may result in additional charges if you choose to hand the car back.

We’ve mentioned it already but it’s worth reiterating - you don’t own the car until the balloon payment is made, and choosing to roll into new PCP agreements repeatedly can mean you never actually own a vehicle outright.

If long-term ownership is your priority, or if you want more flexibility around mileage and usage, another finance option may be a better fit. However, for predictable driving habits and a preference for low monthly repayments, PCP can be a practical choice.

Hire Purchase (HP) to Buy a Car

Hire Purchase, or HP, is another slightly less common way to finance a car through a dealership. It’s more straightforward than PCP because there’s no large balloon payment waiting at the end. Once you make the final repayment, the car becomes yours. This structure appeals to buyers who want certainty around payments and ownership.

With HP, you typically pay a deposit at the start, followed by fixed monthly repayments over a set term, usually between three and five years. Because the full cost of the car is spread across the agreement (rather than part of it being deferred), the monthly repayments are higher than those on a PCP but you also gain ownership automatically at the end.

When is it Most Suitable?

Hire Purchase is often a more attractive option for “nearly new” rather than brand new cars because used cars typically depreciate at a slower rate than new ones. HP agreements can help spread the cost without the worry of rapid depreciation.

So HP is a good fit for anyone buying a nearly new car who wants predictable, steady repayments and a clear path to owning the car outright. It’s also a strong option for people who dislike mileage limits or usage restrictions, as HP doesn’t include any of these conditions.

Other Considerations

Before choosing HP, it’s worth keeping in mind that the monthly repayments will usually be higher than with a PCP, as you’re paying off the full value of the car during the agreement.

Compared with taking out a car loan, HP can feel a little more restrictive, as the car technically belongs to the finance company until the final repayment is made. This means you won’t be able to sell or trade the vehicle until the agreement is fully cleared.

Another thing to remember is that if repayments are missed, the lender may also have the right to repossess the car, as ownership doesn’t transfer until the last payment is completed.

Getting a Loan to Buy a Car

A car loan is one of the most flexible ways to finance a vehicle, giving you full ownership from the moment you collect the keys. Unlike PCP or HP, the car is entirely yours from day one, with no mileage limits, no end-of-term balloon payment, and no restrictions on how or where you buy. A great option for buyers who want simplicity and complete control.

Car loans can be used for new or used cars, whether you’re buying from a dealership, importing a car, or purchasing privately. You simply borrow the amount you need, agree on your repayment term, and pay it back in regular instalments that suit your circumstances.

At Heritage Credit Union, our car loans are designed to be as straightforward and member-friendly as possible. There are no hidden fees or transaction charges, and you can repay early without penalty. Interest is calculated on your reducing balance, meaning you only ever pay interest on what you still owe and the loan becomes more affordable over time as you make repayments. You can try our car loan calculator to see what your repayments could look like.

A Note on our Green Loan for Electric / Hybrid Vehicles

For members (or prospective members) considering an electric or hybrid vehicle, our Green Loan offers a competitive rate designed to support more sustainable choices. It can be used to finance electric or hybrid cars (as well as other green purchases or projects). You don’t necessarily need SEAI grant approval to apply but you can still combine the loan with government incentives.

When is it Most Suitable?

A car loan tends to be the best option for buyers who want full ownership without the conditions attached to PCP or HP. It is especially suited to used car purchases, older vehicles, and private sales, where dealer finance may not be available

For EV buyers, the combination of a competitive Green Loan rate and government incentives can make new electric vehicles surprisingly affordable, even if the upfront cost appears higher at first glance.

Our own Green Loan is also an excellent option for anyone looking to purchase a hybrid vehicle or nearly new EV - whilst hybrids and second hand EVs don’t typically qualify for the SEAI EV Purchase Grant, they do qualify for our excellent Green Loan rates! Check out our green loan calculator to see what your monthly repayments could look like.

Other Considerations

While a car loan gives you the most freedom, unsecured lending may carry higher interest rates than certain promotional PCP or HP offers on new cars. Approval will depend on your income and credit history, and as with any loan, it’s important to borrow only what you’re comfortable repaying.

That said, with flexible terms, transparent pricing, and the ability to tailor repayments to your circumstances, a Heritage CU Car Loan or Green Loan can offer a straightforward and stress-free path to car ownership (with no surprises waiting at the end).

Car Finance Options in Ireland Comparison Table

Which Car Finance Option Is Right for You?

With several finance options available, the best choice depends on your budget, driving habits, and the type of car you’re planning to buy. Here’s a simple way to decide:

• Best for new cars: Personal Contract Plan (PCP) is an attractive option. However, to avoid mileage restrictions and the large final balloon payment, a car loan is a great alternative.
• Best for used cars: A Car Loan offers the most flexibility and works for older cars, nearly-new cars, imports, and private sales.
• Best for EVs: Heritage CU Green Loan offers competitive rates for electric and hybrid cars, with the option to combine with SEAI incentives for new EVs.
• Best for flexibility and ownership: A Car Loan means that you own the car from day one and can change, sell, or trade it whenever you like.
• Lowest long-term cost: Using savings is the cheapest way to buy a car overall, with no interest or fees.
• Lowest monthly repayment: PCP typically offers the lowest monthly payments because a large part of the cost is deferred to the end.

The Last Word

As we’ve discussed, there are a whole host of ways to finance a new or used car here in Ireland and the right choice depends on your budget, the type of car you’re buying, and how important ownership or flexibility is to you.

Before choosing a finance method, it’s worth looking at anything that can reduce the amount you need to borrow such as a strong trade-in or, for fully electric cars, SEAI incentives. Even small reductions can make a noticeable difference to your repayments.

We hope this guide has been useful in encouraging you to compare the options carefully, consider your driving habits, and choose what best fits your financial situation.  If you’d like to talk through your choices or run the numbers on a Heritage CU Car Loan or Green Loan, our team is always here to help.