Demand for electric cars are behind surging levels of personal debt in the Irish economy, the Banking & Payments Federation has said. 

The organisation has calculated the value of car loans taken out in the third quarter of 2023 increased by 39.6% to €189 million.

There was also a significant increase in people taking out loans to do up their homes; the value of such loans increased to €174 million - up 24%.

Overall, Irish people took out €552 million in loans.

Two electric cars charging on a city street.

For Banking & Payments Federation spokesperson Brian Hayes, a desire to go green is the main reason behind the phenomenon.

“I think that’s being really fuelled by a growth in electric car sales - which, at the moment, accounts for one in five all new cars licensed in Ireland,” he told Henry McKean for The Hard Shoulder. 

“So, people clearly are seeing the opportunity of going with cars that are electric.”

Mr Hayes also said many people had delayed big spending decisions during the pandemic.

“We are now in the post-COVID environment,” he said.

“Big decisions about purchasing cars are put to one side for maybe two-and-a-half, three years.

“Now in that post-COVID environment, people are more certain about the future and, consequently, are looking for credit from their bank for the purposes of doing things that they, maybe, wanted to do many years ago.”

An electric car.

Out on the streets of Dublin, Henry found a number of people who had taken out loans - but not all for the reason they gave the bank.

“I took a loan out and went to Thailand with it,” one man admitted.

“[I said it was] for a car.”

And does he have any regrets?

“Definitely not,” he said.

He was there for a month and it cost him €6,000 and he still owes half of it.

Another man said he was unsure whether banks had started giving out loans again too easily.

“I think it’s a cycle, boom, bust, boom,” he said.

“Then they forget and then they borrow again; hopefully, they are more aware and more savvy.

“There were some great strides and a lot of education around this to explain to people what loans were.”

Main image: An electric car charging at a charging station in Dublin. Image: Noel Bennett / Alamy Stock Photo