We’re all accustomed to the fact that we’ll pay the same amount on credit cards for a car rental in Dublin as we will on a credit card.
We’re also accustomed to spending less on a car loan than we would on a mortgage.
Now that’s changing.
The European Union’s Financial Stability Board recently issued new guidance for banks to make sure that they don’t put a negative impact on consumer spending when they offer a car or a mortgage in the EU.
The board, which includes representatives from the European Central Bank, the European Commission and the European Banking Authority, says banks should be able to offer loans that are as low as possible.
So, for example, a $300 car loan may cost you $200 more than a $400 mortgage, but it should be the same in terms of how much you’re paying.
But banks can’t offer low-cost loans that cost less than the market rate for a vehicle, the board says.
And this could change.
In recent months, the ECB has said that it is reviewing the viability of some loan-based financing models, and it wants banks to adopt measures to ensure that there is a fair market for loan-only loans.
“The ECB is concerned that the current market conditions do not allow a fair and consistent market for car loans, in particular because of the lack of uniformity in the lending model and the difficulty of measuring the financial impact of a loan,” the ECB said in a press release.
The ECB’s proposal could affect the way the EU’s lenders are able to lend to consumers.
Car rental companies are currently allowed to use the ECB’s guidelines to provide loans of less than 3 percent of their gross annual sales.
But, under the new guidelines, the banks could not offer a loan that is more than 3.9 percent of sales, and the lender would be subject to a requirement to pay an annual fee of 5 percent of gross sales.
This fee would be assessed on the value of the loan and would be paid on a quarterly basis.
For a mortgage, the lenders’ current guidelines state that they must provide at least 3 percent and 3.1 percent of annual sales of the mortgage in a month, respectively.
This would be a huge jump, particularly given that many lenders have started offering mortgages at 3.5 percent or less in recent months.
If the ECB takes the new guidance into account, the new EU guidelines for car and mortgage loans could make a huge difference to consumers in terms the way they make their payments.
But it won’t affect how lenders are offering the loans or how much they charge consumers.
If you’re planning to rent a vehicle in Ireland, you should start by making sure you understand how much of a deposit you’ll need to put down for the loan, the amount of credit you need and what it’s all about.