car loans v personal loans

[steveyd]

Is there any difference in these two facilities apart from the name?

Is a personal loan used to buy a car any worse or better than a personal loan?

 

[doberden]

you seem to be able to get car loans cheaper because you have an asset...if you call a car an asset!!

 

[steveyd]

Do banks collateralise the car loan using the car? I.e partly secured loan on the car?

 

[quinno]

There is no difference as far as I know - they are both the same, i.e. a loan from a bank / building soc / credit union, over an agreed term (usually 3 - 5 years for a car) with an agreed interest rate. In terms of collateralising, they will not re-possess the car if you default(unless you're leasing a car and default on the lease, that's a different matter), you will be pursued the same as if you default on a personal loan. You can have the loan with / without 'payment protection', this is effectively an insurance presium that will pay the loan for a period if you fall ill, become unemployed etc.

Shop around for the best deal - check out [broken link removed], it goves a list of current borrowing rates in Ireland. Credit Unions seem to be the best value, although they have their won ruukles with regards to savings / track record etc. Also check out if you can increase payments / lodge lump sums to pay off the loan quicker withiout charge, this may be useful if your situation changes (for example SSIA money, job bonus)

 

[crassus]

I thought that if you go into your bank and ask for a car loan, the agreement that you will end up signing is actually a hire purchase agreement rather than a standard personal loan agreement. Legally this means that the Bank actually is the legal owner of the car until all monies advanced are repaid. It gives them more rights to access the car if there is a default.

 

[polaris]

A few years back I got a car loan from pTSB at a lower interest rate (7.7%) then their normal personal loan rate. They simply transferred the money to my current account without looking for any proof that I was actually buying a car. I could have blown the full amount on a holiday etc.

However, I have been with pTSB/TSB all my life and they knew me in that particular branch, I'd imagine they would be a lot more careful with a stranger in off the street.

 

[moneyhoney]

I thought that if you go into your bank and ask for a car loan, the agreement that you will end up signing is actually a hire purchase agreement rather than a standard personal loan agreement. Legally this means that the Bank actually is the legal owner of the car until all monies advanced are repaid. .

I'd hope not! There are many cases of people who signed up for what they thought was a car loan and turned out to be HP, but this most often happens in garages. If you ask your bank for a loan, they should give you a loan - otherwise this could be considered mis-selling. Also, under Consumer Credit Act, must clearly state the typs of agreement it is.

 

[irishpancake]

I thought that if you go into your bank and ask for a car loan, the agreement that you will end up signing is actually a hire purchase agreement rather than a standard personal loan agreement. Legally this means that the Bank actually is the legal owner of the car until all monies advanced are repaid. It gives them more rights to access the car if there is a default.

I went through this recently, see here

after much research, i ended up getting a loan from GE Money at a variable rate of 7.9% (8.1% APR) over 48 months.

This is not specifically a Car Loan, they call it a Flexible Loan, but they know it's purpose is for a car, it's not HP, and there are no documentation fees or extra months added.