Safest way to pay for car?

ripplyuk

I'm thinking its nearly time to replace my car as its starting to give more and more problems. I have money saved in a cash ISA for the new one but I'm wondering how to actually pay this money to the dealer. I'd rather not have to transfer it to my current account and then pay by cheque. Is there any other safe way? I've heard of bankers drafts but don't know anything about them or if its safe. I was also thinking of using my credit card to pay a small amount ie:£200 or so for the protection it gives if something goes wrong. Would this be a good idea? I've also heard that its best to use the dealer's finance company as it gives the best protection if something goes wrong. I paid off my old car on credit over 4 years but it added so much to the purchase price that I made a real effort over the years to save up enough that I wouldn't need credit this time. Is it silly to pay the whole lot up front?

victor2

Bank drafts are as good as cash, but save you carrying wads of money around - don't think you could get one against an ISA though, so you'd still have to pay that into your current account. If your credit card limit covers the purchase price then that could be better for you as you won't have to pay the bill until later, and it costs you nothing extra if you pay it in full. Plus I guess you get the added protection from that method of payment. Not familiar with that side of things though. The dealer would have to be prepared to take the credit card without passing on to you some extra cost to cover their card charges as well.
Not sure a dealer would release a car right away upon receipt of a cheque either - might want the cheque to clear first. Think that's how we paid for our last car though, so maybe it isn't too big an issue.
I'm all for buying a car without finance - it's then yours, you've earned it and paid for it.

ripplyuk

Unfortunately, my credit card limit would be nowhere near enough to pay the full amount or even half. It seems like a hassle to wait for the money to be transferred from the ISA to current account, then pay by cheque and wait until it clears before I can take the car home. Is a bankers draft not as safe as a cheque?

Ultrasonic

The last twice I've bought cars from dealers I've transferred money into my current account and then paid on my debit card. Payment is immediate so you can drive away without waiting for any funds to clear. A banker's draft would achieve the same thing but would involve the hassle of having to go to your bank, and almost certainly paying a fee.

flashg67

Could you pay at least £100 on credit card for your section 75 protection then pay the rest by debit card - debit card merchant charges to the seller aren't normally as high as credit cards, so the dealer might be ok with that.

Either way I think you're going to have to get the ISA money into your current account beforehand unless you can temporarily cover it from another source.

I'd say avoid finance unless you think you'll need the ISA money for something else and/or the finance rate is lower than the ISA interest rate (unlikely).

ripplyuk

Just wondering about this 'protection' with using the dealers finance company that would cover me if something went wrong with the car after purchase. Is this really worth paying the extra to buy the car on credit when I could pay in full? Also, would the dealer not be as happy if I want to pay upfront? And therefore maybe less likely to offer a discount/perks since I'm not taking their finance?

Nodding_Donkey

You'll get exactly the same protection by paying a small deposit on a credit card and then paying the rest by debit card or whatever.

The dealer will wriggle like hell not to take a credit card, even for a small payment but stick to your guns.

Nebulous2

We bought a new car in September. We paid £500 deposit by credit card when it was ordered - at the main dealers suggestion. I then transferred the rest of the money to the dealer's bank account by a faster payment on the same day as my wife picked the car up. Dealer provided a reference number and they checked the cash had gone through before releasing the vehicle.

The whole process was remarkably painless.

cherryblossomzel

I just bought a car. I paid £2500 on credit card, which is the maximum the dealer would take without passing the cc charge on to me (I have a 0% balance transfer offer which I will take advantage of). I paid the rest by debit card. Everything went through immediately, though I must admit I suddenly realised that I had never spent that much on my debit card before and was a bit concerned that the bank would not allow the transaction to go through. Was all OK though.

bigadaj

Bought a car for £2350 about a month ago, had a company car for the last 15 years so was all something I'd not done for ages.

I paid £100 on credit card and then balance by debit card to get teh section 75 cover.

I did nip into the bank a couple of days ago to let them know there would be a large payment coming out, they said all should be fine but made a note on my account and confirmed I'd have my mobile with me if there were any queries.

only_mee

Last car i bought in August, I paid for the car in front of the seller using his pc to transfer 4k to his bank.It was still not showing 40 minutes later in his bank but he was happy i was genuine and i showed him the transfer to his account.Showed up the next morning.