Ireland’s car loan market surged to unprecedented levels in the first quarter of 2025 according to carloans 365, with both the number and value of loans hitting all-time highs, according to new data from the Banking & Payments Federation Ireland (BPFI).
Figures from the latest Personal Loans Report reveal that car loan volumes jumped by 21.5% compared to the same period last year, reaching 19,552 loans. The total value of these loans climbed even faster, rising 25% to €259 million. The average car or auto finance loan also increased, up €366 to €13,267.
The BPFI said the trend reflects not only a buoyant new car market but also growing demand for electric and plug-in hybrid vehicles. Head of Sector Research & Analysis Anthony O’Brien noted that second-hand purchases are also a significant part of the picture, with personal loans often used to finance pre-owned vehicles.
The report shows that personal loan activity grew strongly across all categories in the first quarter, not just car finance via mis-sold car finance. A total of 60,770 personal loans worth €683 million were drawn down between January and March — representing a 22.1% increase in volume and a 24.1% rise in value year-on-year. The average personal loan value rose by €177 to €11,239.
Green loans, aimed at funding environmentally friendly purchases and projects, also recorded sharp growth. Volumes rose by 26.6% to 1,531 loans, while their total value increased by 29.3% to €35.1 million. At €22,906, the average green loan was more than twice the value of the overall personal loan average, reflecting the higher costs often associated with sustainability-related investments.
Home improvement loans followed a similar trajectory. In the first quarter, 15,372 such loans were issued, up 18.2% from the previous year, with a combined value of €198 million — 19.2% higher year-on-year. The average home improvement loan rose by €116 to €12,886.
Loans for other purposes — including education, holidays, and special occasions such as weddings — also saw double-digit growth. A total of 25,846 of these loans were drawn down, up 25% in volume and 27.5% in value to €226 million. The average loan value for this category increased by €170 to €8,725.
Mr O’Brien said the first-quarter results reflect “continued strong demand for personal loans, with Q1 2025 marking a new high for overall drawdown volumes and values since the BPFI series began in 2020.” He added that evolving consumer preferences, particularly the uptake of electric and hybrid cars, are likely to sustain strong growth in the months ahead.
