Buying a car with a credit card, personal loan or finance through the garage?

fatJack

Hi All,

I'm currently looking into buying a new car before mine completely falls apart. I found what I was looking for but I'm now in a quandry about how best to pay for it. The price of the car is £8899.99. Here are the possibilities:

Finance through Sandicliffe garage (provided by Santander) at 12.1% APR with £2000 deposit and a trade-in of my car for £350. (The garage also stuck £399 on for a 2-year extended warranty when quoting me - not that I actually wanted this). The total amount of credit needed was £7011.25 - I would end up paying £11,614.80 over 60 months :eek: I also do not want to be saddled with the debt for this length of time.

Credit Card - I have a really good credit rating but I still don' think I could get what I need on a credit card. However, if I successfully applied for one that Martin is recommending (i.e. 15 months spending at 0%) then perhaps I could use 2x credit cards with a view to tarting just before the 0% runs out or find the shortfall in cash.

Cash - My husband and I have saved a substantial amount of money over the past year (approx. £17k) however, this is to put down on a deposit for a house, which for me, is the priority. I want to avoid dipping into this money as much as possible.

Loan - Finally (I think) I could apply for a loan. There appear to be some relatively good deals out there for loans of £7500+, particularly Sainsbury's and Nationwide. However, I want the option to overpay whenever I can as I want this debt for the shortest time possible.

Can anyone give me some guidance please?

Many thanks!

BoGoF

Is the 'finance' a hire purchase agreement which would unable you to voluntary terminate the agreement after you have paid 50%, may be an option if you don't want to keep the car that long.

Credit card - garages don't like these due to the fees they incur, indeed there was a post the other day where the garage did/would not accept a CC.

Loans/cash.....the same as far as the garage is concerned but do be aware that a loan may affect your ability to get a mortgage or reduce the amount you are able to borrow.

dorisday

If you get a good cc with 0% interest on purchases for a good length of time or a cc with good balance transfer (thats assuming you already have a cc with enough available to buy the car on and then transfer it) would be your best way to do it. I know you would have to pay either a 2% charge from the garage for using the car and or a transfer balance fee on the cc but it still wouldnt add up to hire purchase charges and you would be able to pay it at the amounts you wanted as long as it was minimum payment and more and all paid off before 0% was finished or you could hope to get another 0% cc to then transfer it again.
Have a good look at all the figures and see which works out the cheapest and the best for you.

ebayqueen_2

Hi there

I bought a car last year and wanted to use my cc as part payment so I could boost my Tesco Clubcard points. Garage refused and would only accept a debit card payment. I suppose every garage has its policies so it would be worth your while checking out different places to see what each offer.

catieeb06

The way that I see it is that it's all down to your preferences.

How soon do you and your husband plan to buy a house? How long would it take you to pay back the money into your savings?

With finance agreement- again check it's not HP- can you overpay/settle in full without incurring any penalties?

With the 0% credit card, if you took it over the 15 months, could you afford to pay back the full debt within the 15 months?

Also something to note, if you do have outstanding debt at the time you do apply for your mortgage- this will affect your affordability and will affect how much you can borrow.

Personally I would use the savings- also do you need a car that costs that much?

Cheers,

Catie x