9 Reasons a Sarsfield Credit Union Car Loan is Better than a PCP Agreement

9 Reasons a Sarsfield Credit Union Car Loan Beats a PCP Agreement

Personal Contract Plans (PCPs) have become a popular way to finance new cars. Dealerships often promote them as an easy option — low deposits, affordable monthly payments, and the option to change your car after a few years.

However, PCPs come with conditions that are not always clear at the outset.

A Sarsfield Credit Union car loan offers a simpler, more transparent, and more flexible alternative.

1. You Own the Car from Day One

A PCP is a type of hire-purchase agreement. You do not own the car until the final payment is made. Until then, the finance company remains the owner, limiting your ability to sell or change the vehicle.

At the end of the agreement, a large Guaranteed Minimum Future Value (GMFV) must be paid to take ownership.

With a Sarsfield Credit Union car loan, the car belongs to you from day one.

2. Greater Flexibility

PCP agreements are fixed and restrictive. In most cases, you cannot pay extra to finish early or change the agreement without penalties. If your circumstances change, exiting the agreement can be costly.

With a credit union loan:

• There are no penalties for early repayment
• You can pay more than the minimum at any time
• Your local credit union may be able to help restructure repayments if needed

3. No Balloon Payment at the End

A PCP consists of:

• A deposit (typically 20–30%)
• Fixed monthly repayments
• A large final balloon payment, often up to 50% of the car’s value

You do not own the car unless that final payment is made.

With a Sarsfield Credit Union loan, repayments remain consistent and there are no surprises at the end of the term.

4. No Mileage Limits

PCP agreements usually place a cap on annual mileage. Exceeding this limit can reduce the car’s value and result in additional charges.

Sarsfield Credit Union has no restrictions on how much you drive your car.

5. Freedom to Maintain Your Car

PCP providers often require the car to be serviced at approved dealerships and on strict schedules. Missing a service or using an independent garage can lead to penalties.

With a credit union loan, you are free to service and maintain your car in a way that suits you.

6. Reduced Risk of Negative Equity

Cars depreciate over time. With a PCP, particularly where a low deposit is paid, you may owe more than the car is worth for much of the agreement.

If you need to exit early, selling the car may not cover the outstanding balance.

A Sarsfield Credit Union loan naturally reduces over time, helping to avoid this issue.

7. Lower Overall Cost

PCPs may appear affordable initially, but when you factor in:

• Interest charges
• Fees
• The final balloon payment
• A possible additional loan to buy the car outright

The total cost can exceed that of a Sarsfield Credit Union car loan.

8. Community-Based Lending

Sarsfield Credit Union is owned by its members and rooted in the local community.

Members’ savings are used to provide loans to other members, supporting local families and businesses.

9. Not-for-Profit

Sarsfield Credit Union exists solely for the benefit of its members.

Any surplus income is returned to members as dividends or reinvested to improve services, rather than paid to external shareholders.

Thinking of Buying a Car?

Before signing a PCP agreement at the dealership, speak to Sarsfield Credit Union about a flexible and transparent car loan.

You can also use our loan calculator to explore repayment options and follow us on social media for budgeting tips and car-buying advice.

If you need support with budgeting or financing your next car, Sarsfield Credit Union is here to help.