Mad to buy car on CC?

missmental

Hi,

I'm planning to buy a car with my 0% CC, 20 months interest free. The garage will charge me 3% fee to pay on CC.
Surely, this has to be cheaper than any loan if I pay it off within 20 months.

Am I missing anything?

Thanks

YorkshireBoy

missmental wrote: »

Am I missing anything?

A better card than the one you're proposing perhaps?...

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs#MBNA2

dzug1

How much is the car? Will your credit limit cover it?

jonesMUFCforever

How much is the car costing you?
How much will you have to pay every month to clear in 20 months?
Do you have any savings?
If not how will you make the repayments?
Do you have an emergency fund to cover at least one month's repayment or you could lose the 0% rate.

andyfromotley

missmental wrote: »

Hi,

I'm planning to buy a car with my 0% CC, 20 months interest free. The garage will charge me 3% fee to pay on CC.
Surely, this has to be cheaper than any loan if I pay it off within 20 months.

Am I missing anything?

Thanks

Its the if that is all important.

[Deleted User]

missmental wrote: »

Am I missing anything?

The fact that the 3% is charged on the full amount, whereas the interest on a loan is calculated on a declining sum.

YorkshireBoy

Deleted_User wrote: »

The fact that the 3% is charged on the full amount, whereas the interest on a loan is calculated on a declining sum.

Made me think a little that.

But running some figures through www.whatsthecost.com the 3% fee still comes out on top. Some assumptions made, but...

£7,500 on the card will incur a £225 fee.

£7,500 as a loan over 20 months at 3.6% APR would result in...

The bottom line, is that this loan for £7,500.00, over 20 months, will cost you £386.92 a month.

In taking out this loan, you'll pay a total of £238.49 in interest. The true cost of this loan is £7,738.49

Anything less than £7.5K is likely to result in a (much?) higher APR.

However, both of these options are beaten by the card I linked to earlier with it's £141.75 fee for £7.5K...and you get an extra 4 months in which to repay it. Just remember to pay the deposit on another card to secure section 75 protection!

SuzieSue

YorkshireBoy wrote: »

However, both of these options are beaten by the card I linked to earlier with it's £141.75 fee for £7.5K...and you get an extra 4 months in which to repay it. Just remember to pay the deposit on another card to secure section 75 protection!

But the card you linked to is only 0% on balance transfers, not on purchases.

YorkshireBoy

SuzieSue wrote: »

But the card you linked to is only 0% on balance transfers, not on purchases.

It has 0% on Money Transfers. A Money Transfer is a transfer of cash into your current account, rather than to another credit card provider (which is what a Balance Transfer is).

SuzieSue

YorkshireBoy wrote: »

It has 0% on Money Transfers. A Money Transfer is a transfer of cash into your current account, rather than to another credit card provider (which is what a Balance Transfer is).

Thanks, I don't really know anything MT cards. Do they give the same sort of credit limits as other credit cards?

bigheadxx

Deleted_User wrote: »

The fact that the 3% is charged on the full amount, whereas the interest on a loan is calculated on a declining sum.

But the APR is annual, so 3% per year whereas on a c/c it is a one off charge of 3%. There are alsor better fees with longer interest free periods.