Fianna Fáil Spokesperson on Finance, Michael McGrath TD has welcomed a report from Michael Tutty on the current state of regulation on Personal Contract Plans and has urged the Government to move quickly on the recommendations in the report.
Commenting, Deputy McGrath said that “Personal Contract Plans are being used extensively for the purchasing of new cars. PCPs involve monthly repayments for a fixed period of time followed by what is known as a final balloon payment. At that point, the consumer can either pay the balloon payment to own the car outright or trade it in, and start a whole new PCP again.
“These balloon payments can result in consumers getting into difficulty and alternative finance is often required to pay off the remaining balance. I accept the report’s observation that there appears to be no evidence of significant consumer detriment but it also recommends that the regulation on PCPs needs to be tightened up.
“Fianna Fáil has been calling for reform of the regulation in this area for quite some time. This led to reports being published by both the Central Bank and the Competition and Consumer Protection Commission on PCPs.
“I welcome Mr Tutty’s recommendation that the Consumer Protection Code should apply to PCPs and that PCP providers should have to check the financial capacity of consumers before offering such contracts. I have called for these specific measures to be introduced from the beginning.
“There is little doubt that consumers find this type of car finance attractive and there certainly seems to be a market appetite for them. However, it is in the interest of the motor industry and consumers that consumers are fully informed and protected. I call on the Minister now to act on the recommendations of the Tutty report,” concluded McGrath.