Best car loan - loan or credit card?

Trying_to_stay_positive

Our family car has sadly died and we need to purchase a new one in the next week or so. Looking to spend £4-£5k so we can get a good, low mileage family car with service history that's a few years old and we can have for many years to come.

Finance??!!! Help please. Between us we have accounts with Santander and Nat West and credit cards with Sainsburys and Barclaycard. Having our own business it's a bit of a nightmare to predict incomings but things are looking OK for this year and we may be able to pay off in 12 months but could comfortably(ish) do it in 2 years.

Whilst we don't want to panic buy we are borrowing a friend's car at the moment so really need to get a wriggle on and realise loan/credit card applications take time. I had wondered about purchasing on one of our credit cards, apply for a new 0% transfer and do it that way and transfer again at the end of the 12 months if necessary OR WHAT??? PLEASE PLEASE HELP ME AS I'M GOING AROUND IN CIRCLES. Thanking you in anticipation.

stephane_2

A loan for £4k to £5k, you are probably looking at interest between 12% to 18% if you're lucky and depending how good is your credit file. Best place to start with would be your bank. Maybe you could have certain advantages if saying car is for business, but am not certain. Now a credit card, if you can obtain a card like MBNA or Egg which will allow you to transfer fund to your account and presuming that you can obtain enough credit on it, then it could be an option but it would also mean that if you don't want to be paying interest then you would have to pay the credit card within the term of the offer, which is normally around 16 months, after that interest tend to go up to 16% to 18% sometimes even more.

Trying_to_stay_positive

Thank you (not worked out how to do it yet). Gosh, I never imagined the interest to be that high.

I guess, if the garage will accept it the best way would be to buy on our current credit card which gives us the car now and about 3/4 weeks before the first payment is due to sort out the best way to go from there???

Haven't asked yet but I'm presuming that the finance deals the garages offer aren't competitive.

Don't know if the credit score is good. ALWAYS pay both credit cards off in full which I know they don't like but have a business account (in husband's name) which is in the overdraft roughly to the tune of £4K (although desperately trying not to be) Current account which we use for personal bills is in my name and nearly always in credit.

Trying_to_stay_positive

Yeh - thanked you!

bouncydog1

Is it possible for you to hire a car for a month or so and put it on your own insurance rather than buying something in a hurry? If it were me I would try and look at the various financing options available - bank loan, overdraft (if short term), credit card, super balance transfer etc. (I'm sure the experts can come up with a few more options). By comparing the options you should be able to come up with what the true cost of purchase will be. Some garages also make you pay extra for paying with cc.

You are in a much better position if you can pay cash and you will probably find that you would be able to buy something for a little less that will still be very reliable. If you buy something from a garage, the mark up is going to be huge and you will probably only get a short warranty so you might be better to buy privately something with a full service history, do a check through the AA for finance outstanding etc and save the garage markup.