Credit unions focus on car loans

The Irish League of Credit Unions (ILCU) this week announced a national awareness campaign in relation to car loans as it revealed a significant rise in applications for loans to buy vehicles. In addition, the ILCU has surveyed credit unions across the country to evaluate loan rates across the movement. Drumree man Mark Bailey, ILCU president, said: "Credit unions have noticed a marked increase in applications for car loans since the third week in January, particularly in the market for second-hand cars. Members and consumers in general are still buying cars but they are shopping around for value in the car transaction and, more importantly, the finance deal." He said the rates offered on car loans are particularly noteworthy. A survey carried out by the ILCU on car loan rates offered that of the respondent credit unions who offered special car loan rates, the average APR was 7.1 per cent. Mr Bailey said this compares very favourably with other financial institutions. "The new car market, in particular, is showing some distinctive signs of recovery from a disastrous 2009 and you can argue that it can only get better. The sales for January 2010 with year on year growth of seven per cent show some grounds for optimism given that the first two snow weeks of January meant little or no sales; early sales figures for February also put it ahead of last year. This growth has been aided somewhat by the Government Scrappage Scheme and the willingness of many car companies to match the €1,500, which gives consumers incredible value for a new car. An added upshot of new car sales is the availability of used cars - a market which is reported to be very buoyant." A survey carried out by SIMI in September 2009 found that, of the customers financing a vehicle, 45 per cent used cash, while 27 per cent of customers used a credit union loan. These were the two highest sources of finance used. Mr Bailey concluded: "Unlike other financial institutions, credit unions are welcoming new members every day. And, unlike other financial institutions, credit unions are still providing loans and are still offering credit to our members day in, day out. " The Irish League of Credit Unions is the representative body for over 500 credit unions. It accounts for €11.9bn of savings, €13.8bn in assets and (at €750m) is Ireland's leading provider of social finance.