Buying a car, cheapest way to temporarily pay for it!

larryuk

Hi all,

I'm looking at purchasing a new (to me) car. it will be around £10-12k. I will have this money available in cash at the end of August, however I need the car now.

So I'm trying to work out the cheapest way for me to get the funds for it, for the 5-6 months until I can clear it.

For the sake of making things easier let say it costs £10k

I have one credit card that will allow me to do a money transfer to my bank account at 0% but does incur a 4% one off fee. (So £400)

I have another credit card that doesn't have a money transfer offer, but is a cheaper standard rate of 11.9% Presumably though if I use this to pay for it and don't clear it for 6 months I'm going to be charged £600 interest? Is that right?

Or is there another way that anyone can think of? Cheers!

stator

What's your credit limit on your existing CC?
Do you think you would get a good credit limit on a brand new 0% purchase card?

foxy-stoat

larryuk wrote: »

I have one credit card that will allow me to do a money transfer to my bank account at 0% but does incur a 4% one off fee. (So £400)

I have another credit card that doesn't have a money transfer offer, but is a cheaper standard rate of 11.9% Presumably though if I use this to pay for it and don't clear it for 6 months I'm going to be charged £600 interest? Is that right?

Or is there another way that anyone can think of? Cheers!

No brainer, use the 0% card with the fee.

bigadaj

If you're buying from a dealer then Taking their finance might be worth considering. The discount they offer is often better when up they get commission on finance and you can normally settle the finance early. Many people do this after a week or two, but stretching to a few months might nit cost that much more and be useful in your situation.

londonTiger

Spending £12K on a credit card does seem a little excessive. I don't know how much of a spender you are. But I would be wary of making such a large purchase on a credit card.

It's fine for temporary as long as you have the credit limit. But bear in mind credit cards are not arranged borrowing so any time they can reduce your limit and demasnd you pay all amounts over the new limit.

larryuk

Thanks for the replies. I have two credit cards, one has a £12.5K limit (the money transfer one), the other has a £15k limit (the better standard rate one). I've had both cards for about 10 years, with varying levels of balance on them.

I'm not particularly keen on applying for another card as I don't want to add any checks to my credit rating at all. I've worked hard to better it over the past few years, and with wanting to move to a bigger house in a couple of years time I want to keep it as minimal as possible so would rather utilise what I've already got.

I think the 4% money transfer will end up being the cheapest as can't think of any other way to do it. Also just checked with the dealer and if you pay by card there's a 2% fee.

foxy-stoat

Good, you can either buy the car you want now on the credit card by money transfer and clear the whole balance in 6 month time....or just wait for 6 months and buy a car when you have £10,000 in the bank.

larryuk

Sod it. I'm going to wait. Could REALLY do with the car now, but we will (just about) get by without it for 6 months. We've worked hard over the past several years, to clear cards/debts, it just feels wrong putting that much on a card, even if it is only temporary. I think I'll feel happier paying in cash in 6 months time. :A

Richard53

larryuk wrote: »

Sod it. I'm going to wait. Could REALLY do with the car now, but we will (just about) get by without it for 6 months. We've worked hard over the past several years, to clear cards/debts, it just feels wrong putting that much on a card, even if it is only temporary. I think I'll feel happier paying in cash in 6 months time. :A

I think that's the right decision. My heart sank when I read this:

larryuk wrote: »

I will have this money available in cash at the end of August, however I need the car now.

How sure are you the money will definitely be there at that time? If you are relying on someone else to pay it to you, all sorts of things could happen between now and August. If you max out your credit card on the strength of a promise, you could find yourself in deep doo-doo. Put up with the frustration of waiting, pay cash, and put the £400 to something else. And if the payment doesn't materialise for any reason, you don't have a massive debt to worry about.