Buying a car - Section 75

TomBridges

Hi,

I've already paid a £500 deposit on a Barclaycard, so I am covered under Section 75.

When paying the balance is there any advantage to paying on a different Credit Card? i.e. a Tesco CC (apart from the Clubcard points of course), or event splitting the balance across multiple cards?

I guess this way I would be covered under Section 75 by more than one card provider (I assume in the case of a problem I can only claim Section 75 against one card provider).

Thanks,
Tom

Ebe_Scrooge

There would be no advantage to splitting it over multiple cards, other than any rewards / cashback you may get.

Be aware, though, pretty much all car dealers will pass the credit card fee on to you ( typically around 2 or 3 % or so ), which could very well negate any rewards you earn from the card.

TomBridges

I didn't get charged anything for the deposit so I'm hopeful there is no charge for the balance.

We actually do have the cash if need be... We'll just end up with M&S points instead of Clubcard points!

Aquamania

TomBridges wrote: »

I didn't get charged anything for the deposit so I'm hopeful there is no charge for the balance....

Best to check as it will cost the trader about 2-3% of the amount you pay.

I guess it may depend how much you agreed to pay for the car in the first place as to whether the trader would swallow that cost themselves.

But not many car traders like giving away money once the deal is agreed, no matter how much they've taken from you.

joedenise

My DH and I bought a motorhome a couple of years ago and I paid the deposit on the CC with no charge but they wanted to charge for the balance so paid that with a debit charge.

I think it's quite common that a dealer will let you pay a deposit without charging you on a CC but not the balance.

Denise

InsideInsurance

Ebe_Scrooge wrote: »

There would be no advantage to splitting it over multiple cards, other than any rewards / cashback you may get.

Technically there is an advantage as there is a theoretical possibility that a bank could go bust and thus the S75 lost if that bank no longer exists.

Obviously the chances of a major bank being allowed to fail rather than being propped up or going through a forced acquisition etc is very slim but in principle it could happen so spreading the liability to multiple bank reduces the risk further.

chattychappy

On this basis you also would have the choice as to which bank to go for.

However I do remember seeing a commentary suggesting that where a CC is used after the original deal has been concluded, then S75 doesn't apply. This is because it wasn't a party to the original agreement, so the chain is broken. My reading of s75 is that this is NOT the case, (ie s75 does apply) because in any case s75 doesn't pretend that the CC is a party to the original deal. It merely holds that where a transaction is financed by the CC then the cardholder has a "like claim" against the seller. No breaking of chains...

Ebe_Scrooge

InsideInsurance wrote: »

Technically there is an advantage as there is a theoretical possibility that a bank could go bust and thus the S75 lost if that bank no longer exists.

Obviously the chances of a major bank being allowed to fail rather than being propped up or going through a forced acquisition etc is very slim but in principle it could happen so spreading the liability to multiple bank reduces the risk further.

Fair point. Although if an established player like Barclaycard went under I'd be very worried ! Saying that, who'd have thought that an established player like Lehmans or Barings could have failed

But for most ordinary folk, I think the main issue is going to be that a car dealer won't accept a credit card without passing on the charges - most will accept a CC for the deposit, but the charges for paying the balance will far outweigh any benefit of paying by CC. Interesting point, though.