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Is It Time To Go Down The Electric Car Route?

The Government has set a target that all new cars and van sold from 2030 be zero emission or zero emission capable as one of a range of measures to meet our climate change commitments.

So with the focus on electric cars, we look at the key characteristics of five you can buy. Is one right for you?

Tesla Model S

It’s impossible to think of a modern electric car without a Tesla popping first into your head. Elon Musk’s premium brand has very quickly established itself as the leader of the electric pack when it comes to alternatives for conventional power.

The Model S has spearheaded the success of the California-based manufacturer and it’s easy to see why. Not only can it deliver an impressive 409-mile range (albeit requiring a nine-hour charge), should you opt for the P100D model, you can get near-supercar levels of performance too.

Tied together with a luxurious and well-equipped package, you’ve got one of the coolest cars on the planet. That said, it’ll set you back at least €120k.

Renault Zoe

OK, so it’s got a silly name, but that doesn’t make the Zoe a silly car. First of all, it’s a cheap way to enter the EV scene. Included with that is your own home wall charger, which can take the battery from flat to full in five hours.

Not that you would have to plug it in too much if you were using it purely as a city car, as the Zoe can manage 250 miles on one charge.

Volkswagen e-Golf

Electric cars don’t always have to be bespoke models with wild styling and funky names. Here, you simply get a Volkswagen Golf that so happens to have an electric motor in place of a combustion engine.

Having said that, it is pricey for a Golf, starting from €32,000 (including €5,000 SEAI grant and €5,000 VRT rebate).

Couple that with a rather limited 186-mile range and it’s difficult to justify if you’re just in the market for a new Golf. However, if you want to join the electric revolution in something that doesn’t make a fuss about what’s underneath, this may just be the right car for you.

Hyundai Ioniq

Admittedly the Hyundai Ioniq is not the most inspiring car on this list, but it’s by no means a bad one. It’s understated in design (perhaps even a bit bland, depending on your tastes) and makes for an alternative choice to some of the more conventional cars in its sector, if nothing else.

It’s certainly one pricey Hyundai though and with a measly range of 174 miles that takes eight hours of charging to replenish, it’s going to take a very dedicated Korean car fan to justify buying this one.

BMW i3

This is one for those looking to stand out. Styled like something that would usually barely make it past the concept phase, the BMW i3 is certainly a striking thing to look at.

It’s pretty tech heavy in its construction too, with a body made largely of carbon fibre-reinforced plastic which alone offsets the weight of the 230kg battery pack.

If you’re one for function over form though, the i3 isn’t going to be for you. With a rather poor 81-mile range, it’s not going to serve you well if you fancy taking it out of town. There is a version with a petrol range extender available, but that kind of ruins the point of it being all-electric, no?

By ruth Uncategorised 0 Comments

Buying a 172 car? With a personal contract plan? Read more here. .

It may be a trope, but if it’s too good to be true, then it generally is. If you were to believe some of the promotions flying around car dealer forecourts, you could be driving away in a brand new BMW for as little as €326 a month as Kearys of Cork promises. The truth of course, is a little different.

Yes, if all goes to plan, you could be driving around in a new car at a potentially lower cost than a traditional finance deal by using a “personal contract plan” (PCP) every three years or so.

PCPs, the fastest-growing form of car finance in recent years, see buyers put up a cash deposit, followed by monthly payments over generally three years and finally a “guaranteed minimum future value” which is the sum owing to the dealer at the end of the period.

The idea is that the second-hand value of the car exceeds this lump sum owing and that difference allows the motorist put a deposit down on another new car without having to put his hand in his pocket.

But if things go awry, you could find yourself in a mess of debt, owing more than the car is actually worth – or you may have to walk away with nothing to show despite having paid two-thirds of the value of the car.

The problem lies in a number of factors. First is understanding the concept ofPCP. It’s a little tricky, and when a financial concept is a bit tricky, many suggest that the best advice is to simply walk away.

Secondly, it’s an unregulated industry. As Michael McGrath, Fianna Fáil finance spokesman recently noted, the gap in regulation means we have a situation “where the finance company entering into a PCP arrangement with a consumer is under no obligation to assess the suitability of the product for the consumer or indeed their ability to make the necessary repayments”.

And even more worrying perhaps, is his second point: “As of now, nobody in the CCPC [the Competition and Consumer Protection Commission], Central Bank or Department of Finance knows how many PCPs exist and, crucially, how many customers are defaulting.”

As the sector is unregulated, there may be scope for loose standards. One concern with PCPs is that it can be so easy to access such a deal. Some finance companies promise that “bad credit history” is not a problem; others allow you to “apply for finance online in under two minutes”.

If you can afford a new BMW or Hyundai SUV or whatever it might be, but don’t want to put all your money into it upfront, a PCP could be the deal for you.

If, however, you are only buying that new car because you will make no repayments on a third of the cost for three years – which brings the cost of borrowing down considerably on a PCP deal, at least for the first three or five years – then you need to ask yourself some hard questions, or you could find yourself in a tricky situation three years down the road.

PCPs in an ideal world

The original goal of PCP was to facilitate the more frequent purchase of new and higher value cars, and to keep buyers loyal to a particular make.

For many car buyers, the PCP financing structure works perfectly. It allows them to fulfil their goal of driving away in a new car every three years or so, while making manageable monthly repayments, without tying up their savings.

Let’s consider someone trading in their own second-hand car for €9,000 with a dealer. They then put this amount down as a deposit on a new car, costing €26,495, which they acquire on a PCP deal – a PCP deposit is usually between 10-30 per cent of the value of the vehicle). Monthly repayments come to €278.42 over 36 months (a total of €10,023), and the dealer gives a guaranteed minimum future value – the price the dealer believes the car will be worth to him to sell on at the end of the three-year term – of €11,023, based on 15,000km a year.

Not having to make any repayments on the portion of the car’s value covered by the guaranteed minimum future value figure brings down the cost of monthly repayments considerably.

Now, some 2½ years into the term, our driver gets a call from his dealer. He’s kept the car in good shape and stayed within the appropriate mileage, and the dealer believes he could sell his car for €20,000.

Given that our purchaser has a Guaranteed minimum future value of €11,023 on his car, the dealer says he now has equity of about €9,000 on his car – the second hand sale price minus the guaranteed minimum future value figure which is owed to the dealer – which he can put towards a new car.

So, our car buyer duly drives to the forecourt, drops off his car, and drives away in a new car. He has had to put no money down for the deposit, and the new version of the car has only gone up in cost slightly, so it means a slight increase in his monthly repayments which he can handle.

The cost of buying his car if he had opted for a credit union loan at an APR interest rate of 8.2 per cent, with a similar deposit, would have been €531.93 a month. That is far higher than the monthly repayments on his PCP deal. The PCP is also cheaper than a typical hire purchase deal would have been.

So, for this particular car buyer his deal has worked out to his advantage.

Derek Kavanagh at Bank of Ireland says the key to the success of the product is to have the guaranteed minimum future value set at a conservative basis.

But, as John Byrne, legal and public relations manager of vehicle data checking service Cartell.ie, notes, finance companies tend to make first-time deals “as attractive as possible” so that there is equity there that can be used to continue the chain of purchases.

Where they can go wrong

The biggest risk of all with PCPs, perhaps, is the differential between the guaranteed minimum future value and the trade-in price, as this is what gives our car buyer the “equity” which they can transfer to their next new car. This figure is hugely reliant on second-hand car prices.

The guaranteed minimum future value needs to be considerably below the trade-in price of the car, so that the buyer can either generate some equity for the next deal, or at least wash their hands of the deal.

However, there’s a trade-off. If a buyer wants a lower initial deposit and lower monthly repayments, the guaranteed minimum future value of the vehicle will necessarily be higher and that may leave little equity at the end of the term to finance the deposit on the next car.

“Some people overestimate what they’re going to get at the end,” says John Byrne, and others make the mistake of thinking that the guaranteed minimum future value goes towards the deposit on the next vehicle.

Getting back to our example, let’s consider that sterling continues to weaken and that car prices get ever more competitive north of the Border and across the Irish Sea, causing trade-in values to plummet. It’s not an unrealistic scenario.

The trade-in value of our car will plummet to, say, €14,000, while the car also has a higher guaranteed minimum future value of €13,000 as our purchaser wants lower monthly payments. That now leaves equity of just €1,000. So what can they do?

Well, as Hyundai says in its promotional material, you can:

1) “walk” – ie give the car back and walk away;

2) “talk” – ie come up with another €8,000 yourself to cover the deposit shortfall and go for a new car again;

3) “buy” – pay the €13,000 optional final payment, or guaranteed minimum future value, and own the car outright, or:

4) you can sell it on, repay the guaranteed minimum future value and pocket any profit arising if you manage to achieve one. Bear in mind you may have to get permission from the finance company to do this.

If car prices were to fall so dramatically that car falls into “negative equity” – where the debt on it is worth more than its value – PCPs do provide protection as it is the finance company that takes the hit.

But this doesn’t mean that drivers are completely protected from negative equity. What if you do want to buy the car outright at the end of the term? Do you want to take out loan on an asset that’s already worth less than the loan you need to take out to cover it?

Another risk is that you don’t keep within the required mileage, or damage your car over the three-year period. Either of these effectively breaches the contract and can increase the cost of the deal to you.

Another factor is the cost of financing. You may well have acquired the initial car on a 0 per cent deal; but three years later that deal is gone and you’re now being charged 6 per cent on the rollover car purchase, which can change the sums significantly and require you to fund more of the deal through your own pocket.

For some, to make the deal work at the end of three years, they borrow the shortfall to pay the dealer and repay it over the following three years. But that increases their overall cost of financing. And, of course by now, the value of the car they’re borrowing against has depreciated again in value, as it’s more than three years old.

At Capital Credit Union in Dundrum and Rathfarnham, chief executive Gerard McConville has noted customers like this coming through the door.

“Most [car buyers] realised there was a balloon payment; they just didn’t realise just how restrictive it is,” he says.

Flexibility?

Car dealer EP Mooney says PCP is “by far the most flexible way to finance your car these days”. Only it isn’t, really.

People’s circumstances change. If you lose your job, have a baby, go back to college, get stuck with a higher rate on your mortgage, there is little you can do to amend your agreed monthly repayments on your PCP to reflect your new financial reality.

With a standard car loan, you can always sell the car to pay off the loan, but a PCP deal is much more restrictive. And if you hand the car back, you’ll lose out on the difference between the sale price and the amount owed.

Regulation

The regulatory gap in relation to car financing is also a cause for concern. In May, the CCPC told this newspaper it had concerns about the regulation of PCPs and it had raised the issue with the Department of Finance and the Central bank..

Bigger car financing houses also reported concern, with Brian Merrigan, the head of BMW finance in Ireland, saying: “We’re regulated more by our own audit than by any institution in the Irish market.”

And the Central Bank’s new credit register won’t include car loans, essentially because of a quirk in the way the legislation was drafted. As a result, lenders can make deals with individuals who wouldn’t necessary get credit from established institutions. If those loans turn sour, dealers could be left out of pocket.

The Market

It is estimated that somewhere in the region of 30 per cent of new cars are sold on PCP deals. For example, in 2016 some 26 per cent of new BMWs were bought on finance while Volkswagen said that around 39 per cent of new cars sold in Ireland are financed through their internal bank. Of those new Volkswagen cars sold, almost 29 per cent are sold on PCP.

As to the likelihood of people defaulting, BMW’s Brian Merrigan said that his company sees delinquencies from about 0.8 per cent of customers. Bank of Ireland wouldn’t say what their delinquency rate was but they did say that it was lower than on hire purchase agreements.

In the US, there has been increasing concern around PCP finance deals, with stories emerging of people taking out loans to pay for their guaranteed minimum future value payment at the end of deal.

Analyst Max Warburton from Bernstein Research is “reasonably relaxed” about credit quality for now, noting that “lower credit score customers usually seek financing from independent lenders” who will end up taking the hit if a borrower defaults.

However, he made it clear that some deals aren’t always as good as they seem.

“Leases, personal contract plans, balloon payments and all sorts of other fun and games have made vehicles appear easier to buy for the consumer,” he says.

A “good” PCP deal

Purchase price: €26,495

Deposit: €9,000

Monthly repayments: €278.42

Guaranteed minimum future value: €11,023

Trade-in price after three years: €20,000

Equity to bring to new PCP deal: €8,977

A “not so good” PCP deal

Purchase price: €26,495

Deposit:€9,000

Monthly repayments: €161

Guaranteed minimum future value: €13,000

Trade-in price after three years: 14,000

Equity: €1,000

Original article can be found here:

www.irishtimes.com/business/personal-finance/buying-a-172-car-with-a-personal-contract-plan-read-this-1.3148532?mode=amp

 

 

By ruth Uncategorised 0 Comments

Affordable Home Improvement Tips

Find big savings on those high buck remodelling projects

You’ll save money on remodeling projects if you plan well in advance, get several bids, do simple parts yourself, shop for materials, design with energy savings in mind and follow these other easy ideas.

By the DIY experts of The Family Handyman Magazine

 

 

Tip 1: Plan your project and get bids well in advance

Advance planning pays off

You get the best contractor deals when contractors aren’t so busy.

Have you ever tried to find a contractor in March to start your new three-season porch that you want completed by Mother’s Day? It’ll cost more than if you’d found a contractor in January. Most contractors plan out months ahead and don’t want to disrupt their schedules. They’ll shoot you a high bid, because they really don’t want to fit you in…unless you pay a high rate.

Most building trades have busy seasons and slow seasons. Plan ahead, and you’ll get more competitive bids during the slow seasons. Best times to schedule:

  • roofing—cold or rainy months
  • indoor renovations—winter or during rainy months
  • heating—late summer, before fall
  • air conditioning—late winter or early spring
  • chimney cleaning— anytime except fall!
  • project design (architects)—fall and winter

Tip 2: Pay extra for energy-saving features

Invest in the future

Investing in energy-saving features now will save on future expenses.

With energy prices rising, many contractors are offering energy efficiency upgrades (at an additional price). These might include higher-efficiency windows; guaranteed air sealing; extra-thick insulation; and higher-efficiency heating, cooling or other appliances. If they don’t offer this, you can ask what additional measures they (or you) can take to improve your home’s energy performance. Then compare the estimated energy savings with the cost of each upgrade. A payback period of seven to 10 years is good. (Simple payback is the time it takes for the savings to equal the original cost.) Keep in mind that upgrades done during the remodeling process always cost less than upgrades added later.

Tip 3: Hire an architect or designer for at least an initial sketch

Don’t throw money away

Don’t waste money by building an addition you don’t like!

The most expensive mistake you can make is to build an addition or remodel a room that you don’t like when it’s finished. Professional design help during the planning stage helps you tailor the space to fit. Sometimes it takes only one or two key details to make that room special. Most architects and designers will walk you through the initial planning for a modest fee. Gather lots of visual material to illustrate your ideas. And be sure you’re on the same page as your spouse! Be prepared to do some legwork.

 

Tip 4: Pitch in and do parts of the project yourself

Sweat equity

Tackle the parts of the project within your skill range.

Doing the entire project yourself is by far the best way to save. But if you don’t have the time or skills, your part-time sweat equity can reduce costs. Consider taking on such labor-intensive jobs as demolition, moving materials, digging, cleaning up the job site after work, sanding trim or painting. Coordinate the jobs with the contractor in advance and agree on their value. Beware! Once you commit yourself, make sure to complete the work in a timely way. Tardiness can throw off the construction schedule and cost you more in the long run!

 

Tip 5: Plan for future upgrades if you can’t afford them now

You don’t have to wait until you can build your dream addition all at once. You can get started now and gradually add as your finances allow. But work from a master plan so you don’t have to go back and tear out or upgrade what you’ve already done.

For example, consider:

  • an electrical service with capacity for the future addition, workshop or hot tub
  • in-the-wall wiring for electronics in every room or a future home theater
  • rough plumbing for a future half bath or hot tub
  • wiring for future lighting fixtures
  • rough framing for future doors or windows
  • French doors that open to a future deck.

Tip 6: Compare the price of remodeling with the cost of buying new

Remodel or move?

It may be financially smart to buy a different home rather than invest in your current one.

Your house is your most important investment as well as the place you call home. Although you may love your house and neighborhood, check how much your addition would add to the value of your home. Creating a luxury home in a modest neighborhood may not make financial sense. A real estate agent or home appraiser can make a close estimate. If you can’t recoup at least 75 percent of the cost when you sell, at least consider the advantages of buying another house with the space or features you need. It may well be a better investment to move rather than to add on.

 

Tip 7: Shop for materials yourself

Shop smart

Shop for finish materials and appliances to take advantage of sales.

You won’t save much by trying to stockpile lumber, drywall, electrical wiring or other basic building materials. But when it comes to the finish materials—carpeting, appliances, faucets, countertops, light fixtures—your own footwork will pay off. Not only do you get exactly what you want, but you also can find bargains, especially if you start collecting these items well in advance. You can even plan to reuse a stylish old stove, distressed hardwood flooring or other items that add a creative touch to a room. But clear your decisions with your contractor; installation costs might be higher for unusual requests.

 

Tip 8: Don’t overdo windows and skylights

Windows are hot!

Excessive glass area will raise energy costs and decrease comfort.

Big windows and skylights can have a spectacular effect in a new addition, making it feel bright and cheery and offering great views. But more is not always better. Not only are windows and skylights expensive, but even energy-efficient ones will sharply increase your heating and cooling bills. Large skylights can make a room feel like a furnace in the summer! You may have to replace your air conditioner, heat pump or furnace with a larger one. Or perhaps add units to keep the room comfortable.

Tip 9: Avoid moving the plumbing or changing the foundation

You can’t always avoid it, but any alteration to these two systems typically adds thousands to a remodeling project. Neither is simple. New plumbing often requires breaking into walls and floors; resizing lines to meet newer plumbing codes; and replacing old, out-of-date pipes. New foundations usually require excavation, concrete and other heavy, expensive work. The price jumps whenever you add these two items, so ask yourself if you really need to move the kitchen sink during a kitchen remodel, or if you really need the extra space in a bathroom bump-out.

Tip 10: Order over the internet

Internet shopping

Internet shopping will save time and money.

Can’t find a nice-looking low-voltage light fixture at a nearby home center? The Internet puts a wide selection of products at your fingertips. Even better, it gives you access to hard-to-find specialty items at competitive prices. Often you can save 40 to 50 percent over the list price.