0% interest to buy a car

ztan

Hi all, new to credit cards. Got a mortgage, figured that but CC are still a mystery to me!

In short, I need to buy a car in the next 2 weeks, because I'm starting a new job. I have no savings at the moment, as we have literally just moved into our new home and have begun paying the mortgage. I was planning on saving for 6 months and then buying a car, but this has come up all of a sudden.

I have found a car for around £600, and insurance for around the same- so I need to borrow about £1200- preferably interest free. I can afford to make sizeable repayments (£100p/m+) so would hopefully have it paid off again quickly, but if not definitely before the 0% runs out.

Is this a good idea? Is it really that simple that I can borrow £1200 and pay it back over a year, without having to pay anything additional?

I am extremely sensible with money, and have never had a credit card before. I'm a home owner. Previously had an overdraft which I paid off each month- still have the facility, but I never use it anymore. So I'm hoping my credit score would suffice for a Tesco's 13 month 0% card...

Thoughts?

tamarto

If you've just moved chances are you wont get a credit card any time soon.

lisyloo

Are you buying the car privately or from a car dealer?
A private buyer won't be able to accept credit cards and a dealer will probably want to charge a fee to cover the processing costs, probably around 2.5%.

You could always get an SBT (super balance transfer) card that allows 0% transfer to your current account.
Often there are fees of about 4%, but it's still a cheap loan.

Beware that with a £600 car, you will need to set aside money from repairs, because that's a very cheap car, so I would set a budget.

amd tamarto is right, you new address wioth scupper your chances of getting a card.

Hax

If you've just moved into a new house, then presumably, you're not listed on the electoral role for that address. This will have a serious impact on you chances of getting a credit card.

Other than that, your theory is more or less sound. IF you get a 0% on purchases deal over twelve month and IF your limit is say £1500, then you can put £1200 on there (car + insurance) and then pay off over 12 months at £100/month and incur no interest. You could even just pay the minimum each month and put the remainder of the £100 into a savings account and earn a little bit of interest before using the balance to clear the card before the 0% period expires.

ztan

Already on the roll... the thing was through and sent back in the post within a day of moving in.

I am concerned too that with the mortgage- although it's joint- will go against me.

lisyloo- I will be setting savings aside in the mean time each month anyway, so that's not a concern... as long as the car runs reasonably well for 6 months, I can handle things from there.

It really is just a case of I need £1200 and would prefer not to pay back interest on the amount. Can't ask relatives, as we've already squeezed them dry with various curtain poles, washing machines and other things we needed but didn't ask for but were given...

If I can get the 0% card, then I'm jumping in feet first... like they say, debt isn't bad- only bad debt is bad... *crosses fingers*

noelphobic

lisyloo wrote: »

Are you buying the car privately or from a car dealer?
A private buyer won't be able to accept credit cards and a dealer will probably want to charge a fee to cover the processing costs, probably around 2.5%.

my dealer allowed me to pay 2k on a credit card without charging a fee. Any more and they would have charged.

tamarto

ztan wrote: »

Already on the roll... the thing was through and sent back in the post within a day of moving in.

I am concerned too that with the mortgage- although it's joint- will go against me.

lisyloo- I will be setting savings aside in the mean time each month anyway, so that's not a concern... as long as the car runs reasonably well for 6 months, I can handle things from there.

It really is just a case of I need £1200 and would prefer not to pay back interest on the amount. Can't ask relatives, as we've already squeezed them dry with various curtain poles, washing machines and other things we needed but didn't ask for but were given...

If I can get the 0% card, then I'm jumping in feet first... like they say, debt isn't bad- only bad debt is bad... *crosses fingers*

Just because you've returned the form doesn't mean you will be on the roll straight away, you can't be sure the car will run reasonably well for 6 months, not when the price of it is £600. I pressume you've already checked to see if the seller accepts cards?

Hax

Even if the dealer wants to charge you a fee, they'd likely only want 3% to cover their costs - so you could just put the extra £36 or so on the card too - and then pay £103/month

You say that you are already on the roll - have you verified this? Sending the form back doesn't necessarily mean you're on the roll - they can take a while to update - particularly this time of year I believe as they have a mass update of their records (I seem to remember reading something like that on here somewhere!)

lisyloo

Yes you're right they are sometimes prepared to take certain amounts without a charge. However on a £600 car they probably haven't got that much leeway to negotiate, on the other hand they might be desperate to do some business, you never know.
It's jsut not that common to take the whole amount on a credit card without charge these days.

ztan

Not entirely sure... as I don't have a specific car in mind, just a few options at the moment, although most do accept CC.

I think in theory this is a good idea.. it's just the practical side. I will have to do some digging re electoral roll etc and find out if I stand a chance, before I apply and get declined.

(Silly to think I may struggle, when I know my 18 year old brother, with no credit history, no nothing got offered 3 credit cards without questions! Strange world we live in these days!)

tamarto

ztan wrote: »

Not entirely sure... as I don't have a specific car in mind, just a few options at the moment, although most do accept CC.

I think in theory this is a good idea.. it's just the practical side. I will have to do some digging re electoral roll etc and find out if I stand a chance, before I apply and get declined.

(Silly to think I may struggle, when I know my 18 year old brother, with no credit history, no nothing got offered 3 credit cards without questions! Strange world we live in these days!)

Ah ok, this quote

'I have found a car for around £600, and insurance for around the same-'

led me to believe otherwise.

Was your brother offered them or given them? I get almost daily invitations for a CC however i know i wouldn't get them. :cool: