Professor Philip Lane:

I will say a couple of things on that and then hand over to Ms Rowland. We have studied this, and the CCPC has studied it. A range of issues arises, one of which is that this is a new form of finance. When we have a new form of finance which is superficially attractive to many people, we must ask if there are hidden risk factors. This is more developed in the United Kingdom. Some of the concerns are not intensive here. The funding of the PCPs is not, by and large, coming from the main Irish banks so the concern that this poses a financial splitting risk is not really present here. For many individuals, we have looked at the question of financial gain going through a PCP versus a car loan and so on. It depends on individual circumstances. On average, it is quite finely balanced.

We then come to the consumer protection issue, which is people who may not run through the calculation an accountant like Deputy McGrath might make in terms of calculating the financial pros and cons and the protections available to them. I will hand over to Ms Rowland shortly but I want to say that this is not a simple because buying a car is partly non-financial. We also want to have consumer protection in terms of whether the person is being sold the car they were promised, whether all of that is in order and assessments about wear and tear. All of those are non-financial issues which, typically, would not be a Central Bank issue. On the other hand, there is a financial component to this, as the Deputy mentioned.

There are no easy answers to this. The current legislation is clear that we do not regulate hire purchase agreements but we have been thinking about it, so I will ask Ms Rowland to expand on that.