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Close Brothers Motor Finance has launched a new used car PCP product in Ireland that aims to de-risk second-hand vehicle finance for dealers and expand access to more affordable finance for customers.
Branded as Close PCP, the product introduces a guaranteed minimum future value (GFV) across a broad segment of the used car market – a move the company says will make around 24,000 additional vehicles eligible for PCP deals.
The development addresses a long-standing constraint in the Irish motor finance market. While PCP deals account for roughly a third of car purchases overall and are the preferred finance option for around 70% of Irish motorists (Carzone.ie), only about 5% of used car sales are PCP-funded. A key reason has been the limited availability of GFVs on used stock, which has left dealers exposed to depreciation risk.
Close PCP removes that barrier by underwriting the future value of the vehicle. According to the company, this enables dealers to offer PCP finance on a wider range of vehicles without taking on residual value risk, opening up additional stock for retail.
Donal Murphy, Managing Director of Close Brothers Motor Finance Ireland, said the product is now available to all 2,500 franchised and independent dealerships operating in the Republic. “We’re shifting the depreciation risk from the dealer to ourselves. That allows retailers to offer more competitive finance terms and close more deals on higher-value vehicles.”
Used car transactions in Ireland have risen by nearly 30% year-on-year as of August 2024, but the lack of PCP options has been a limiting factor in converting interest into higher-value sales. With average car prices now €3,700 higher than in 2020, Close Brothers says affordability is a growing concern for both dealers and buyers.
PCP deals under the new scheme significantly reduce monthly payments. For example, Close Brothers estimates that a 2022 VW Golf would cost around €529 per month under Close PCP, compared to €736 on a typical hire purchase (HP) deal. A 2024 Audi Q5 could see repayments cut by more than €600 per month.
Stephen Bradshaw, Head of Marketing at Close Brothers Motor Finance, said the company is backing the launch with a nationwide multi-channel campaign targeting both dealers and consumers.
Bradshaw said: “This is a significant step for Close Brothers Motor Finance in Ireland. By announcing Close PCP, we are letting our dealer partners and customers know that they now have more choice. With our innovative guarantee, Close PCP delivers a level of flexibility and affordability for Irish motorists that is long overdue.