Financing a private car purchase with 0% credit cards ?

jonesMUFCforever

gwapenut wrote: »

Good point - I'm not sure about that. Whether the transaction being private overrides the credit card company providing credit for something not fit for purpose. I guess the crux would be "what is fit for purpose" in a private sale, I think rights extend to it being MOT-worthy and that's about it.

Thanks YB for the update about M&S Sterling TCs - I hadn't realised that, and am glad I found out before I intended relying on it!

Unless the private buyer accepts credit cards which is going to be highly unlikely, there will be no s75 cover - end of.
The only way the OP can use a credit card is by getting a card that supports money transfers to his bank account.
What he does after with the money is of no interest to the credit card company.

muddymickey

Thanks for all the replies.

Regarding affordability - this is not an issue. I have more than the required amount tucked away in ISAs, and more than sufficient disposable income to fund the repayments.
The idea was that if I could fund the purchase with 0% (or minimal at least) interest, it would be better to do so and leave my ISAs untouched.

Regarding whether I should spend that sort of money on a private purchase - well that's down to me, it's a car that I know the history of, and to buy the equivalent from a dealer would probably cost me at least £1k more. I'm happy with the risk.

Have been looking at the "Super Transfer" cards. Thanks for the link above, I wasn't aware that there was such a facility. Seems that 4% is the going fee on those cards, for the first couple of months anyway.

Have also looked into Paypal (again, thanks for whoever mentioned that). From what I can workout, there's a 2.9% fee when you transfer money to a friend from a Credit Card via PayPal. So I could make the payment to my wife, then transfer to my own bank account via internet banking.

So, I think (unless anyone has better ideas!) a good approach would be to:
- apply for 0% spending credit card(s). There seem to be some available with around 15-16 months 0% period.
- transfer from these via Paypal at a 2.9% fee to bank account. Stick in savings account until ready to buy car. Pay minimum amount off every month needed to keep 0% deal. Start monthly payments into another savings account (with intention of paying off the debt. Prob around £300/month).
Just before the 0% periods end, pay off what I can, then do a 0% balance transfer of what's left to another 0% card.

Does that sound:
A) possible
a good plan ?

Thanks again!

muddymickey

Ah, just noticed the PayPal transfer fee in UK is 3.4% (the 2.9% figure I got was off the US site).

sithemadmonkey

I don't know this for certain, but I would have thought that a transfer from Paypal to a bank account would be treated by your card provider as a 'cash-like transaction' rather than a purchase.

If that's the case then you won't get the 0% purchases offer, and will be lumbered with a sky-high cash interest rate (that accrues immediately) instead.

I would make very sure which type of transaction it would be logged as before going ahead with this plan.

Incidentally, the super transfer option @ 4% will only cost you 0.6% more, which I work out at £84 if the spend is £14k, so it's a pretty good backup if the Paypal option doesn't work.

jamesml

Don't agree with the above post - Your CC company don't have anything to do with the transaction after if hits Paypal, so they wouldn't know. Any transaction I have made on paypal before with my CC has been treated as a purchase, although admittedly I have paid an invoice raised in paypal rather than sending a tfr - perhaps worth looking into to ensure. Your wife could always invoice you...

jonesMUFCforever

jamesml wrote: »

Don't agree with the above post - Your CC company don't have anything to do with the transaction after if hits Paypal, so they wouldn't know. Any transaction I have made on paypal before with my CC has been treated as a purchase, although admittedly I have paid an invoice raised in paypal rather than sending a tfr - perhaps worth looking into to ensure. Your wife could always invoice you...

On the figures quoted by OP it is more likely that his Paypal account would be locked for money laundering purposes.
Sorry but this is a stupid idea.

muddymickey

sithemadmonkey wrote: »

Incidentally, the super transfer option @ 4% will only cost you 0.6% more, which I work out at £84 if the spend is £14k, so it's a pretty good backup if the Paypal option doesn't work.

Thanks. The actual transfer would be around 10-11k, as my existing car would fetch me 3k+.

So I'm thinking now I might as well just apply for something like the MBNA Platinum card, which offers 4% fee on money transfers and then it's 0% for 29 months.

If I went for a 0% spend credit card, the 0% period is shorter, so I'd have to do something at the end of that period which would incur come sort of fee, so the 4% monet transfer fee might actually work out cheaper in the long run.

Just checked my creidt score on Experian, and it comes out at 999.
So I'm hoping there won't be an issue being accepted, and that I'll get a decent credit limit (from what I've read, MBNA tend to give among the highest limits?).

Thanks for all the input.

Any more thoughts / better ideas, feel free !

forgotmyname

Only thought i have is i checked your credit score and it came out as cherry / orange / apple.

The 999 they gave you means nothing to the lenders who have their own systems.

jonesMUFCforever

Does the private individual that was selling the car still have it to sell?