More than a quarter (27 percent) of consumers in Ireland who have a car loan have no idea what interest rate they are paying on their motoring finance, according to research released today.

The research was commissioned by Volkswagen, who questioned consumers on how they feel about motoring finance in advance of the launch of the 152 registration plate.

Looking at the demographics of who is borrowing to finance their motoring needs, 25 – 44 year olds are most likely to have a car loan (20 percent) compared to national average of 17 percent and just 12 percent of 18 – 24 year olds. While car financing is most common between 25 and 54 year olds,  once motorists reach 55 years of age, borrowing to finance a car drops to just 15 percent. Most car loans (51 percent) are for values of between €7,000 and €17,000. Just eight percent of consumers borrow more than €20,000.

Commenting, Volkswagen Group Ireland CEO, Lars Himmer, said: “As the leading car brand in Ireland we understand how consumers feel about motoring and we have put in place innovative finance solutions so that Irish consumers can get more car for their money. Competitive options, such as PCP, from Volkswagen Bank have kept the Irish motor industry alive through difficult times and now that the economy, and the market, is recovering we are well positioned to deliver real value for Irish motorists. It is important that consumers are aware of what their car finance is costing them so that they can make the best purchasing decisions.”

Volkswagen will be offering customers more for their money on 152 orders with a range of additional extras including free styling and technology packs and competitive finance offers including PCP from 1.9 per cent from Volkswagen Bank. Most models will also offer a lower APR when you opt for a higher grade model.

For the 152 plate Volkswagen is reintroducing what has been a hugely popular offer of a lower APR to consumers who opt for one of Volkswagen’s higher specification models. Since launching this offer in January there has been a significant shift in the grade of car chosen by Volkswagen customers. Taking all finance into account, in 2014 39 per cent of finance customers chose the Highline grade, whereas so far in 2015 this has risen to 58 percent. The move is even greater when it comes to cars financed through PCP, which in just one year has risen from 46 percent choosing Highline in 2014, to 73 per cent choosing Highline so far this year.

When asked what interest rate they were paying, more than one in five consumers surveyed (21 percent) pay between 4 per cent and 5 per cent, more than one in seven (15 percent) pay between 6 per cent and 7 per cent and almost one in eight (12 percent) pay between 2 per cent and 3 per cent. When it comes to access to competitive interest rates, 18 – 24 year olds are the savviest shoppers with the majority (64 percent) paying less than 5 percent interest.

The availability of flexible finance packages such as PCP is driving competitiveness in the car finance market and supporting sales in an industry which is still in recovery. It is clear that awareness of PCP finance is growing amongst consumers, with 39 per cent of respondents saying that they are likely to look at it as a finance option, for their next vehicle. The majority (53 per cent) of motorists say that they know what their total motoring costs are per month and per annum and almost a third (31 per cent) would consider upgrading to a higher spec car if it could cut their running costs.