Surge in borrowing to buy electric cars, while green loans for home improvements also up

There has been a huge increase in the value of car loans, figures from lenders have shown.
Households are also taking out more “green loans” as well as borrowing for home improvements, holidays and special occasions such as weddings.

The value of all loans taken out hit a high of €552m from July to September last year, according to the Banking and Payments Federation Ireland (BPFI).

It is the highest level of personal lending since the banks began measuring such borrowing at the start of 2020.

The stand-out rise was loans for cars, up by almost 40pc to €189m when compared with a year before.

The number of car loans rose by almost 26pc to 14,994 in the period, with one in five of those for electric vehicles.

BPFI said this was the highest volume and value for loans in a third quarter of any year since records began.

Home improvement loans were also up, the industry body said.

There were 13pc more loans taken out to improve homes, with the total hitting more than 14,400 in the third quarter of last year. The value rose by 24pc to €174m. These were the highest levels of activity in four years.

A total of 23,991 loans for other purposes, including education, holidays and special occasions such as weddings, were drawn down.

This is a rise of 7pc year on year, with values also rising by 14pc to €189m over the same period.

The value of green personal loans rose to €27m, an increase of 144pc year on year.

A green personal loan is one taken out for energy-efficient home improvements such as having solar panels or heating controls installed.

The number of green loans more than doubled over the same period to 1,250.

Banking statisticians said the average green loan was relatively high at €21,603 compared with the average for all loans at €10,336.

BPFI chief executive Brian Hayes said the figures showed a continued rise year on year in personal lending in the third quarter of last year.

“While growth was seen across all categories, including home improvement loans and loans for other purposes such as holidays and special occasions, we have continued to see a particular surge in car loans,” he said.

The figures showed the highest third-quarter car loan volumes and values to date.

This was due, in part, to the continued growth in new car sales, especially electric cars.

Electric vehicles accounted for 19pc of new cars licensed for the first time in 2023, according to the Central Statistics Office.

Mr Hayes said the average car loan value was up by more than €900 to €10,336.

Other types of car loans, such as forecourt finance deals, are counted separately and were up by €1,268 to €12,599 on average.

This is likely to reflect higher car prices and growth in luxury and e-vehicles, Mr Hayes said.

Source: Charlie Weston, Irish Independent, 9th of February 2024.

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