Credit card fees when buying a car

Zwoog

I am about to buy a new Ford car from a main dealer. I've enquired about paying part of the cost by credit card (several thousand pounds) and paying the balance by debit card.

The dealer says they will charge me 2.5% fee for using the credit card (this is high in my opinion, but not unexpected).

However my issue is that the dealer said the fee would be calculated on 2.5% of the whole car cost, not just the amount of the credit card payment.

Has anyone else encountered this ? It doesn't seem right to me - how can that be justified ?

thanks
Zwoog

shane1104

the 2.5% fee is added manually to the PDQ Machine, so the "Cashier" as it stands would be physically entering the fee.
So I'd argue this, and when they say enter pin, say the amount is incorrect.

elle_may

Daughter paid cash for her car but we put £100 on CC, salesman okay with this, so we could have the protection. Was only charged £1.50 of this total, it is only what you put on the card that you are charged for, not the whole purchase.

Zwoog

Yes that's what I was expecting, just the fee on the value of the card payment. I think the salesman has misunderstood - I will ask the manager for clarification.

thanks again.

mrsammyp

Charging you 2.5% on the purchase price is unfair. I would call another ford dealer in your area with your quote, you may find you save yourself more than just the 2.5%!

eDicky

Zwoog wrote: »

Yes that's what I was expecting, just the fee on the value of the card payment. I think the salesman has misunderstood - I will ask the manager for clarification.

There's no misunderstanding or mistake, they are simply charging the maximum possible unless you negotiate and compare elsewhere.

CalumHeath

The merchant has to pay a fee for each credit card transaction, whether they absorb this cost or pass it on to the customer is their choice.

But yes, charging you 2.5% of the whole amount of the sale, rather than just the credit card amount, is the merchant's choice - there's no law forcing them to do it. I would suggest it's not good for business but I suppose they count on people not arguing it.

So it's up to you whether you want to argue it or not.

eskbanker

CalumHeath wrote: »

charging you 2.5% of the whole amount of the sale, rather than just the credit card amount, is the merchant's choice - there's no law forcing them to do it.

There is actually - The Consumer Rights (Payment Surcharges) Regulations 2012 "ban traders from charging consumers more than the cost borne to them for accepting a given means of payment". Unless the dealer has a pretty extraordinary merchant services agreement then I think they'd struggle to justify 2.5% of the entire purchase price rather than 2.5% of the CC payment to the Office of Fair Trading....

Edit: got that the wrong way round in terms of how quoted post was worded, these regulations effectively compel merchants not to charge 2.5% on the whole sale value.

McKneff

Picadilly motors allowed me to pay £1500 without charges and the rest by debit card.


Call their bluff and tell them you are about to cancel

molerat

My dealer accepts £500 without charge.

Zwoog

Thanks everyone. I also thought that merchants weren't allowed charge excessive fees, under consumer law brought in to deal with the antics of some low-cost airlines a few years ago (as referenced by eskbanker above)

I have no intention of paying the fee on the whole car value; if they are trying it on then it smacks of sharp business practice, and I may re-consider whether I give them my business.