Central Bank shows need for tight monitoring and regulation of PCPs - Pearse Doherty TD
Sinn Féin Finance Spokesperson Pearse Doherty TD has reiterated his call for a stricter approach to the use of personal contract plans (PCPs) in car sales.
He said today’s report on personal contract plans (PCPs) by the Central Bank shows the need for tight monitoring and regulation of the products.
The report states that 'PCPs are the current driver of the growth in bank-related lending to Irish households for non-mortgage purposes, and have become the most prevalent source of car finance in the Irish market since April 2016'.
Deputy Doherty said:
“Today’s report is yet more evidence at how important PCPs have become and how they need to be tightly monitored and regulated.
"We know from other reports and from Freedom of Information requests I have received that there is concern about PCPs falling through the regulatory cracks.
"Previous documents I received under the Freedom of Information Act show concern at official levels that 'wilder elements' could become involved in the PCP arena. We are talking about a market with a value of €1.5 billion at the end of 2017, with 126,249 contracts outstanding.
"That remains my concern and I still believe full regulation of PCPs by the Central Bank must be on the cards especially in light of the statistics produced today.
"The report states that 'PCPs are the current driver of the growth in bank-related lending to Irish households for non-mortgage purposes, and have become the most prevalent source of car finance in the Irish market since April 2016'.
"There is a danger of a bubble emerging and bursting because of the prevalence of PCPs.
"There are serious concerns that buyers can sign up for a car loan without fully understanding the loan conditions or without a comprehensive financial check to assess if they can afford it. This is a complex financial product that requires full Central Bank regulation.”