Buying a 12K car with a 0% credit card, viable?

sniperpenguin

Thanks for reading

I'm currently on 27K (Homeowner), and have been offering a job with an increase in salary (30-32K) plus a car allowance of £400 (so 320 after tax).

Ive gone through all the options for finance / leasing etc, and am now considering buying a car outright for £12-15K on 0% purchases.... My question is this - how difficult is it to obtain a card with that high a limit?

I currently run 2 cards:
- Barclaycard World (Old Egg Money) - £2K limit, rotating balance of around £400.... never charged interest.
- Tesco Clubcard Mastercard - Unsure of limit. Used on 0% promotion for £1400 purchase, £1025 left on balance with money in savings account ready to pay it off.

My plan was to get the 0% card, make the purchase (also giving me more bargaining power due to no trade-in, and HP not required), then throw the entire car allowance on it each month (using expenses / mileage to offset fuel and set aside small amount for tyres etc).... when the period ended, BT to another card or use savings.

Again, thanks for reading

leeroy2009

your current limits show that I doubt any new card will give you a limit you require

Tixy

You might need to factor in whether the car dealer will charge a % fee for paying by credit card - most do.

Its possible to get cards with a limit in excess of £12k. I would guess on your current salary that it would probably be tough to get that as a opening limit in current times. If you have a clean credit history I think you'd be more likey to get around the £5k mark. If the tesco card was recent then see what limit they gave you as that could be a good indication.

I've found MBNA backed cards to offer the highest initial limits to myself and my family.

verityboo

sniperpenguin wrote: »

Thanks for reading

My plan was to get the 0% card, make the purchase (also giving me more bargaining power due to no trade-in, and HP not required),

The dealers make their money selling finance, not cars, so you will have less bargaining power. It is also worth checking what Fee they will charge for a credit card payment, if they will accept payment that way

sniperpenguin

leeroy2009 wrote: »

your current limits show that I doubt any new card will give you a limit you require

Thanks for the reply Leeroy. One point that is worth mentioning is that the Barclaycard limit is artificially low, since the Egg Money cards were always intended to be used as a current account with 4% credit interest / cashback rather than a traditional credit card (I started with a £1200 limit! )....

At the time I applied over 7-8yrs ago for it, they offered me their standard Egg Mastercard with a 5K limit.

Hudson1984

don't forget many car suppliers will charge 3% ontop for being bought off credit card so that's an additional £360 which no, not a huge amount but worth considering.

also, take home pay on £30k is £1934, add the £4800 to this (car allowance) take home becomes £2206 which is actually £272 per month after deductions.

you would also need to bare in mind insurance, maintenance etc. I have the same option although they have a company car alternative which I opted for. No not the status symbol i'd like but at a actual cost of £67 per month it was preferable to the car allowance even though it looks a nice idea having an extra £5k

do they have a company car alternative? also what are their requirements on car i.e no more than three years old, diesel blah blah blah

sniperpenguin

Thanks Hudson

Car Allowance isnt subject to any taxes beyond standard 20% income tax, so monthly amount is £320. There are no requirements beyond diesel, reasonably new, and able to carry a server (essentially rules out superminis and cabriolets). Mileage will be 18000/yr so needs to be a comfortable cruiser, and considering I'll be spending a good chunk of tim in there - not poverty spec.

First target was the usual BMW 320d, when I decided I didnt want to pay extra for the vehicle (Im keeping my MGTF as a toy ) I started to look at the "nearly new" market.

Hudson1984

Car allowance is subject to all taxes and deductions in exactly the same way as a £4800 salary increase. You will take home the same as someone earning £34800 (as apposed to £30000).

If you're keeping a "toy" then keep a level head to what you should buy as a work mobile, yep you'll be spending loads of time in there but you also have to fuel it etc, I have an insignia as a company car and drive all over in it. No, it doesn't turn heads, no it doesn't win off the lights but it does return good MPG and doesn't cost a great deal plus I haven't got to worry about depreciation as I don't own it.

i'd really look into the amount car allowance will give you as - not meaning to be rude - but I do think your estimates are incorrect