Buying a Car - Loan vs Credit Card

logie48

I was thinking of buying a car at around the £9k mark. My plan is to put £3k of my savings towards it and get the rest of the money from a loan or a credit card.

I had my heart set on a £6k loan over 2 years from Santander which would have worked out at £6500 payback (minus PPI).

Then I thought about these interest free credit cards. I was wondering if I could put the £6k on the Tesco 15 months interest free credit card, pay it at a substantial monthly rate, and then balance transfer it to another interest free card once the 15 months have passed.

Any advice on this?

Oh, and another question, can I opt out of paying PPI when (and if I was) applying for a loan. I feel I wouldn't need it.

Many thanks in advance.

AHAR

If you were accepted for the Tesco card and if it had a high enough credit limit and if you could get another interest free card 15 months down the line then, yeah, you could do it that way.

Lum

Plenty of articles on this site about credit card tarting which is what you plan to do.

The biggest sting in the tail for your plan is the balance transfer fee that all 0% cards come with these days, plus you're relying on there being a decent deal in 15 months time.

Yes you can opt out of PPI.

Also worth noting that Santander have a very poor reputation for customer service.

I guess if there's no 0% deals around in 15 months, you could apply for a loan then, and you will have saved 15 months worth of interest.

logie48

Thanks guys.

AHAR

The car dealer probably won't want to absorb the credit card transaction fee they'll be charged, so find out how much that'll cost you first.

slyracoon

AHAR wrote: »

The car dealer probably won't want to absorb the credit card transaction fee they'll be charged, so find out how much that'll cost you first.

Most dealers won't allow a high value car purchase on a credit card because of the high fees they would have to pay to process the payment.

Most dealers I have used will only allow the desposit to be paid by credit card with the balance due in cleared funds (debit card, Bankers draft etc).

(This means the dealer isn't hit with high fees and By paying the deposit by credit card your covered by the consumer credit act for the entire purchase cost and not just the deposit that was paid by credit card. - http://www.which.co.uk/consumer-rights/buying-services/what-to-do-if-a-company-goes-bust/your-rights/)