Relocating to Ireland: question about financing/leasing

TheBardWest

Greetings, all. My family and I are relocating from the US to Ireland (Dublin) soon, and I'm wondering if any of you know how difficult it might be for us to acquire financing to purchase or lease a (used) vehicle?

So far I've had zero luck getting responses back from the few dealerships I have contacted. I would appreciate any assistance you could provide!

bmw535d

why would you move from america to a recession stricken island in the middle of the Atlantic?

ninty9er

Will you be bringing any savings with you?

If so, make contact with a credit union in the area you are moving to and explain your situation. Members with an established savings history can borrow up to 3 times their savings once an ability to repay has been established. Credit Unions are much more flexible in terms of early repayment, payment breaks and reducing payment amounts if your situation changes.

Leasing isn't commonplace in Ireland for individuals and leasing a used car in particular is a phenomenon that I would, without knowing a whole lot about it, assume doesn't even exist here. At least I know nobody who leases a used car.

Midnight_EG

bmw535d wrote: »

why would you move from america to a recession stricken island in the middle of the Atlantic?

Was there a point?

OP, why not send a few Dealers/Banks some emails asking?

Seeing as you're moving over, I'll assume you'll be getting the boat. Could you bring over your own car, assuming you're also bringing a bit of savings which I'm sure will cover VRT/Tax/Insurance/NCT

TheBardWest

I'll be working for Microsoft - really just jumping from one recession to the other.

We will be bringing savings with us - enough for what we call a 'down payment' here in the States. Somewhere around $2000-4000 USD for the car. The tip about credit unions is helpful - I've been with my credit union here in the states for 15 years, so they might have a recommendation or a 'sister' bank they can help with.

I will have a BoI account setup as well, but my understanding is that they wont be keen to loan me money for at least 6 months, even though I will have proof of past income/savings, and proof of current income via Microsoft.

Midnight_EG

MicroSoft you say. Company car, would it be a possibility for you? Benefit-in-kind-esque

Holsten

You could buy a decent enough car for that sort of money straight out.

Drummerboy08

Two problems.

Any Irish financial house will not allow a used vehicle to be put on contract hire - for too many reasons really.

Second - it will be next to impossible for an individual to secure approval for a contract hire deal.

I've tried it that many times this year for different customers it isnt funny. Always ends in the same result.

Berty

You may have to consider approaching dealers like Volkswagen or Ford who have their own finance houses

I.e Ford Credit and get a finance for a used vehicle through that.

I still like the suggestion about the credit union. They are run by the local communities and so long as you have savings they may approve you up to 3 times your savings.

Have you researched our car prices in relation to US car prices, our insurance our fuel? You will soon be very angry!!

TheBardWest

No - Microsoft wont purchase a company car for me.

Drummerboy08 - When you say it is next to impossible to secure approval for a contract hire deal - do you mean to say that when someone in Ireland normally wishes to buy a used vehicle, they buy it outright with cash? The price range for vehicles we're looking at is 12-15K Euro. I cant imagine many people have that kind of cash/savings - but perhaps I'm wrong!

Thanks for the suggestions about credit unions and dealer/manufacturer financing. I know all the costs are much higher than here in the US - we're trying to budget accordingly.

Berty

Leasing and Contract hire in Ireland outside of being done commerical by companies is not very common.

People tend to visit dealerships who get them finance from finance houses with higher interest rates but these are IMPOSSIBLE to get these days. A lot of people got themselves into debt this way, now the finance houses are getting screwed because people cannot pay them and you will find it hard to get finance this way.

The banks are in the same position.

Drummerboy can explain more about his business model but its not to disimilar as it relies on companies to provide finance.

The avenues to attain finance have become increasingly difficult to get which impacted heavily last year on dealerships but some created their own finance companies and some just closed down.

You really need to open your account and sit down with a loan officer or open your local credit union account.

Do not expect to walk into a dealership and get financed within 30 minutes. Those days are long long gone.

rebel.ranter

The most popular way cars are purchased over here are by taking out a personal loan (sometimes called motor loan) 3-5 years normally or as mentioned above a Hire Purchase agreement, again of 3-5 years duration.
The interest rates are normally cheaper on a personal loan (from the Credit Union for example). Sometimes on hire purchase agreements there are balloon payments at the start or the finish of the agreement. HP can be organised by a car dealer once you have agreed a purchase.

As others have mentioned the costs to run a car over here is quite high.
- We have Annual Road Tax based on the engine size or CO2 emissions levels. Details here
- Motor insurance
- Gas is $6.66 (€4.88) US Gallon

Most people here would consider a 2000cc (2L) a "large" engined car & now diesel engined cars have become really popular thanks to better MPG & cheaper fuel prices.

TheBardWest

Thanks for all this great info, everyone. It seems like it will be a challenge, but we have some options to work with. Worst case scenario is we buy a 'clunker' for the first 6 months to a year until we can save up enough for a better vehicle.

We are a family of three, and hope to travel around the country occasionally. We're hoping to get a VW TDI - 1.8 or 1.9L ideally. Probably an Estate model to fit all our baby gear in the boot. The VW Jetta we had here in the US (recently sold) got 45-50MPG on the interstates, and we expect our annual driving to be considerably lower, since we wont be driving 1000 miles roundtrip to visit family often. ;-)

Berty

Why not buy yourself a VW Jetta over here?

Mind you the big problem you will find is something we call "Paddy Spec" which means anything nice like leather, cruise, sat nav, electric windows and so on are removed from the vehicles and sold back to you.

Meaning

Many cars are basic spec unless you spend a little more.

Try this website for your car research for prices

http://www.carzone.ie

Here is a link to the Jetta Listings for all years.

http://www.carzone.ie/search/results?searchsource=finder&nParam=4294910685&channel=CARS&cacheBuster=1271283267022250#nParam=4294910685%2B200590%2B102456&sortby=Make|0&channel=CARS&currency=EUROS&searchResultsView=THUMBNAIL&maxrows=10

Unless otherwise mentioned or you haven't thought about it. It might be worth your while learning to drive a manual(stick) because they are not popular over here and cost a lot more money.

TheBardWest

Berty wrote: »

Unless otherwise mentioned or you haven't thought about it. It might be worth your while learning to drive a manual(stick) because they are not popular over here and cost a lot more money.

Can you clarify this? I know how to drive manual (in the US) but was planning on automatic, since I'd have to relearn to drive manual with my left hand! ;-)

FGR

Automatics are generally much harder to come by second hand or even new on dealership lots. Reason being that Autos are generally more expensive and as such we (us being Irish :rolleyes:) must go for the most basic spec of car with a manual gearbox.

I swear that people here would still opt for manual windows on a 2010 car if given the opportunity :rolleyes:.

But aside from that - Welcome to Ireland TheBardWest! A car I would recommend is the Skoda Octavia. Skoda are under the Volkswagen Umbrella and the Octavia is roughly the same size and spec as a Jetta but for less money. You can find some second hand DSG/Tiptronic models around too!

jimmycrackcorm

Buy a really cheap second-hand car with the money you currently have and then once your bank credit line is up and running you can sell it and buy a car you had in mind.

If it's is cheap enough you won't lose that much when it comes to sell.

Berty

TheBardWest wrote: »

Can you clarify this? I know how to drive manual (in the US) but was planning on automatic, since I'd have to relearn to drive manual with my left hand! ;-)

In Ireland we have VRT and CO2 ratings on our vehicles.

VRT(Vehicle Registration Tax) is charged on an extra above the base spec so VRT is charged on Automatic gearbox's.

CO2 is charged per percent of CO2 a car emits. Cars with automatic gearbox's are heavier therefore attract higher C02 rates.

Good example. Come over here and try to rent an automatic car. Check the price against a manual.

Normally on a new car here there is a €2500-€3000 price difference between a manual and an automatic gearbox.

But as you say you already drive "stick" you will be fine and have more choice.

Heck some of the Irish cannot even drive properly anyway so you will be fine.

stevenmu

The banks are still lending money and giving car loans, they're just being quite careful about the loans they give out and making sure people will have the means to make repayments.

I think you have some factors in your favour. You work for Microsoft and they are not likely to go bust any time soon. If Microsoft asked you to transfer to Ireland, you are obviously quite important to them and they're not likely to make you redundant any time soon (if you asked to transfer tell the bank MS asked you ). Presumably MS don't transfer secretarial and clerical staff very often so you're very possibly in a highly skilled and relatively well paid role. You mention a BoI account, if this is being set up through Microsoft and they have a relationship with the bank and send them lots of customers, then the bank will be eager to treat any MS employees well.

I would suggest you bring with you detailed bank records, a detailed credit history. A letter from MS stating that you are vital to their operations and they expect to employ you for the foreseeable future would help, HR should be able to sort you out with that.

Pkiernan

REMEMBER to bring copies of your Insurance history with you.

This can be accepted by most Irish car insurance comanies, so long as your insurance is current (or not more than 2 years have elapsed since you had insurance).

If you do not have insurance history to show them, you will be paying a huge premium.

In my case, I was quoted €1600 a year for a 9 year old 2.0 litre Volvo.

In the US I had a 6 ltr Chevy P/U, a Harley, 2 VW beetles and 2 quads insured for less than $1000 per year total.

TheBardWest

Thanks for all the advice here, friends. I have found one car dealer who is willing to work with us - to offer a lease of a new Skoda Octavia (Estate) 1.6TDI for 27,000Euro - 500Euro per month for 36 months, with 12000Euro buyout option at end of lease.

This seems quite high to me - both in terms of base cost and monthly - but I'm not familiar enough with the market to say. Can anyone comment...?

The other option would be to ask BoI (with whom Microsoft will be assisting me in getting an account) to see if they'd give me a loan for a used vehicle, such as a VW Passat TDI or similar.

Drummerboy08

How is this dealer financing the deal? You may still have to be approved for finance, unless the dealer is self financing.

Tell you what. PM me your email address now, and I will work out some figures for you in the morning. This will give you an indication of the price. I'll speak to someone in finance and see what the situation is in this case.

R.O.R

TheBardWest wrote: »

Thanks for all the advice here, friends. I have found one car dealer who is willing to work with us - to offer a lease of a new Skoda Octavia (Estate) 1.6TDI for 27,000Euro - 500Euro per month for 36 months, with 12000Euro buyout option at end of lease.

This seems quite high to me - both in terms of base cost and monthly - but I'm not familiar enough with the market to say. Can anyone comment...?

The other option would be to ask BoI (with whom Microsoft will be assisting me in getting an account) to see if they'd give me a loan for a used vehicle, such as a VW Passat TDI or similar.

I'm guessing you aren't doing much mileage, and the price is including VAT on an Octavia Combi 1.6Tdi DSG Elegance, but excluding maintenance? If so, then that's a fairly decent price and would more or less tie in with the figures I ran.

Just make sure that €12,000 isn't a baloon payment that you'll have to pay - sounds like a very balls out buyback price to me, even for a small mileage, relatively high spec, auto diesel estate.

slimjimmc

R.O.R wrote: »

I'm guessing you aren't doing much mileage, and the price is including VAT on an Octavia Combi 1.6Tdi DSG Elegance, but excluding maintenance? If so, then that's a fairly decent price and would more or less tie in with the figures I ran.

Just make sure that €12,000 isn't a baloon payment that you'll have to pay - sounds like a very balls out buyback price to me, even for a small mileage, relatively high spec, auto diesel estate.

If he's going with Škoda Finance then could well be a baloon payment

Under Hire Purchase, Škoda Finance purchases the car on your behalf. You then pay an agreed installment over 1 to 5 years. The car becomes your property at the end of the agreement upon payment of a purchase installment.
With Hire Purchase you can defer part of the capital cost until the end of the agreement and pay a final "balloon" payment, thus making the monthly installment more affordable.

OP, details of the Octavia estate are listed here, just to give you an idea of what your getting. List prices do not include dealer costs such as shipping from the factory, prep work before handover, etc.

galwaytt

I'm surprised no-one has mentioned the other two elephants in the room: licence and insurance.

If you only have a US licence, you'll have to start out on a provisional/learner permit here, first.

Want to guess what that'll do for your insurance rates ? By which time, btw, a 1.8l car may be nothing more than a pipe dream..........

There again, Skoda Fabia in 1.2 isn't a bad a choice, either.

MunsterCycling

Remember that a US driving licence isn't valid here for anything but an automatic IIRC

TheBardWest

I believe this is dealer financed. He did say he could sell me used vehicles, etc. but that I would have to obtain financing on my own, which might prove difficult. I'm also aware of road tax, registration, license and insurance restrictions.

I know there are lots of hoops to jump through for all those things. Some of them I'm getting assistance with via our relocation specialists, and some we'll just have to deal with.

A US license is valid for 12 months, technically. That said, we plan on taking the theory test as soon as possible, and understand we have to go through provisional licensing to get a full license and that the delay is long.

gino85

just to add another note, gas prices are alot higher here than in the US, you might want to consider that when buy a large engined car, and if i were in your position id buy a car for 2k or 3k with an NCT on it untill i could save up enough for a better model.

the NCT is a test which irish cars have to get every 2 years if they are over 4 years old to state that they are road worthy


also on the issue of getting an irish driving licence, you are not supposed to be driving without a full licenced driver in the car with you while you are on your learners permit so that might be a problem for you

TheBardWest

gino85 wrote: »

just to add another note, gas prices are alot higher here than in the US, you might want to consider that when buy a large engined car, and if i were in your position id buy a car for 2k or 3k with an NCT on it untill i could save up enough for a better model.

This is why the Skoda that the dealer is offering is appealing. 60+mpg, low CO2 emissions, low taxes, etc.

And yes - I'm aware of licensing and permit restrictions, thanks.

TheBardWest

Just wanted to add that I've confirmed this would be a new vehicle lease (2010 Model) with the Elegance trim.

So do the numbers seem reasonable given our situation?

R.O.R

TheBardWest wrote: »

Just wanted to add that I've confirmed this would be a new vehicle lease (2010 Model) with the Elegance trim.

So do the numbers seem reasonable given our situation?

Check whether the €12,000 is an optional buyout price, or whether it's a balloon payment that you have to pay at the end of lease.

Based on my cost for one of those and a buyback of €12,000 I get more or less the same monthly (finance only - no maintenance) cost.

I would not be putting a €12,000 value in to that car when it's due back.

TheBardWest

Sorry I didn't clarify that. The buyout is optional - not a balloon payment. Kilometer allowance is 20K per annum.

Drummerboy08

Nice car as it is, it aint worth 12k after 3 years, even with only 60,000kns on the clock. Its a fairly ballsy buyback to be honest. I dont think you'd get that price beaten by anyone else.

TheBardWest

Thanks for that input ROR and Drummerboy08. I don't know if we'd buyout at that price either. After 3 years, I would hope that our credit would allow us to purchase something new with a lower monthly payment or purchase something used out right.

One thing I can't quite understand is this: If I buy a car like the Skoda new - it has a small engine, low emissions, low road tax, etc. After only 60K on the clock, it still seems (at least by US measure) a good car, all things considered. But it seems that in Ireland, cars with >60 or 75K on the clock are common in the used market. Is this because the road tax increases over time? I feel like there's some part of that equation I'm missing.

Drummerboy08

Your road tax stays the same, regardless of mileage or age.

I suppose it is a symbol of the good times in Ireland - most people changed their cars every 2/3 years, so that means there are alot more used cars on the market than there should be.