PCP Car Finance in Ireland: Are You Paying Too Much? How to Check and Cancel

Personal Contract Plans (PCP) have become the most popular way to finance a car in Ireland, with over 60% of new car purchases now funded through PCP deals. But many Irish consumers do not fully understand what they have signed up for — and the finance companies are not rushing to explain. If you are in a PCP deal and worried you are overpaying, or if the final 'balloon payment' has come as a shock, here is what you need to know.

First, understand what PCP actually is: you are not buying the car outright. You are paying for the depreciation over the contract term (usually 3-4 years), with a large lump sum (the Guaranteed Minimum Future Value or GMFV) due at the end. At that point, you have three options: pay the GMFV and own the car, hand the car back and walk away, or trade it in for a new PCP deal. The problem is that many dealers push customers into option three — rolling into a new PCP — without explaining that this cycle of never owning a car can cost tens of thousands more over a decade than simply buying one.

If you want out of your PCP early, you have rights under the Consumer Credit Act 1995. Section 63 gives you the right to voluntarily terminate a hire purchase or PCP agreement once you have paid 50% of the total amount payable (including the GMFV). This means you can hand the car back and owe nothing further, provided the car is in reasonable condition. Many consumers do not know this right exists because finance companies are not required to highlight it. Check your agreement — the total amount payable is stated, and once you have paid half, you can exercise this right by writing to the finance company.

If you believe you were mis-sold PCP finance — for example, the dealer did not explain the GMFV, did not tell you about mileage restrictions and excess mileage charges, or led you to believe you were buying the car — you may have grounds for a complaint. Start with a formal complaint to the finance company (not the dealer — they are different entities). If they do not resolve it, escalate to the FSPO. The FSPO has upheld several complaints about PCP mis-selling and awarded compensation. Our guide walks you through the entire process of checking, cancelling, or complaining about HP and PCP finance.