Credit card surcharge by car retailer

savesomedoh

After many weeks searching for a new car, we have settled on a Golf from a VW dealership. I have a balance of £5,000 after part-exing my old car, which I will be using my interest free credit card for instead of a loan. The dealership tell me there's a 1.5% surcharge for this (£75). Surely this is 'excessive' which is what the Government are trying to drive out. But... good old OFT say an estimated reasonable charge is 2.5%. Where do I stand? obviously I don't want to pay any further levy for spending my cash!!

Any tips/advice?

meer53

If you want to pay by CC you will have to pay a fee. It's your choice. I don't think 1.5% is excessive really. It's not your cash you are spending, it's money you are borrowing from your CC company.

molerat

1.5% is low for a car dealership, probably less than they are being charged. When I paid for a car recently they put up to £500 free and anything over was 2.5%.

HHarry

Agreed, when we bought he garage charged 3% - although part of the deal was that we'd get this waived.

_Andy_

"Where do I stand? obviously I don't want to pay any further levy for spending my cash!!"

Don't pay by CC then

[Deleted User]

Agreed. If it's your cash, then pay cash.

InsideInsurance

Echo what others say, that 1.5% is fairly low and probably isnt too far off the rate they are being charged unless they are a very large large chain.

Ultimately everything in a purchase is up for negotiation and the dealership may or may not be willing to waive it but then if you were a cash buyer that would mean you could have gotten it cheaper. It costs them a percentage of the sale and so they arent going to be simply absorbing it.

Hominu

savesomedoh wrote: »

Any tips/advice?

1.5% is about the lowest your going to get and would be acceptable. The norm is closer to 2.5%.

However, on a 5K purchase, I'd expect the car dealership to waive this charge. Heck, last time I bought a car from a dealership I got them to wipe £1000 off the list price! Took a bit of doing (including walking out of the dealership), but it was well worth it. I did pay cash though rather than credit.

sicker

They probably have a fairly good margin on the sale, so speak to the manager , not the salesman, about waiving the cc charge. Going back a few years now so things have changed I bought my car using Egg Money cc thus gaining 1% cash back into the bargain. I had hinted that I would go elsewhere so the manager dropped the charge rather than loose the sale. You never know, you may get lucky with a bit of bartering. Good luck,

opinions4u

savesomedoh wrote: »

After many weeks searching for a new car, we have settled on a Golf from a VW dealership. I have a balance of £5,000 after part-exing my old car, which I will be using my interest free credit card for instead of a loan. The dealership tell me there's a 1.5% surcharge for this (£75). Surely this is 'excessive' which is what the Government are trying to drive out.

No. They don't want the dealer to profit from the charge. It's highly likely that they are not profiting from the charge.

But... good old OFT say an estimated reasonable charge is 2.5%. Where do I stand?

On your feet.

obviously I don't want to pay any further levy for spending my cash!!

Use the card, pay the fee, get interest free credit.

Or don't use the card, avoid the fee and don't get interest free credit.

The charge is reasonable. The garage almost certainly won't waive it (ask) and you have other choices.

Simon7685

When I bought my new car in April, I had a balance of just under £3k to pay. The garage I used does not take CC's but I wanted to do it that way to take advantage of a 0% offer. So they arranged for me to pay at the main dealer where they get all there stock from. It cost me £75 for the privelage.

When I arrived at the main dealer to pay, I overheard them talking in the office and they said that the £75 was £5 for carrying out the transaction and £70 for their trouble, in other words money for nothing............

It is about these obscene chsrges were capped at what it actually costs about 50p. companies just jump on the bandwagon and use it as a way to make more money out of the customer.