Car Finance and Credit Card

SolveMyMaze

Happy Christmas Eve to everyone,

I've had a look around the threads here before posting this question and would really appreciate any advice that you might have.
I went to go and look at a second hand car yesterday and the intention was to pay part of it in cash and the rest on an interest free credit card.

When the sales rep and I were discussing this, I was told by him and another rep that if I use my credit card then I would be subject to a 2% fee from the credit card company. The alternative was to take out the finance agreement instead, but of course I didn't want to go down the route of paying any interest, especially when I have an interest free credit card that would more than cover the cost of the car.

Anyway, the two reps then informed me that I could take out the finance with Black Horse and within 30 days I could immediately pay off the balance of the loan with my interest free credit card and there wouldn't be a 2% credit card fee, nor would I accrue any interest with BH.

After a rather lengthy check online this morning, it appears that BH don't allow you to pay off a loan by way of a credit card. Does anyone know if it would be possible to withdraw the loan in the 30 days cooling off period and pay for it on the credit card that way instead?

I really don't want to be tied into a credit agreement where I'll be paying 13% interest as opposed to the 0% on the credit card. This was an expense I wasn't expecting since my car was recently written off by a plonker and thankfully I had just taken out a 0% interest credit card for emergencies.

If I can't pay off the loan in any way shape or form with the CC, where do I stand with the dealership?

I won't be taking possession of the car until the 30th December, and I haven't actually signed any paperwork yet, but I'm really worried about being tied into a credit agreement that I can't afford.

Any help would be much appreciated. I tried to contact the dealership today, but they don't work on a Sunday.

sourcrates

Usually when a salesman starts erecting brick walls in-front of me, i just get up and leave.........there are plenty of garages out there, not all will charge a 2% fee for credit card payments, however, it is becoming the norm, as that's what the card company charges the forecourt.

A credit agreement is just that, designed to run for x amount of years, charging x amount of interest, they don't really like you paying it off early, especially THAT early, i think whatever you choose to do, there will be some sort of fee involved, thats why i hate buying cars with anything but cash.

Can you not buy a cheaper car for cash ?

If not, then you may as well take the 2% hit, as its the next best option for you.

SolveMyMaze

sourcrates wrote: »

Usually when a salesman starts erecting brick walls in-front of me, i just get up and leave.........there are plenty of garages out there, not all will charge a 2% fee for credit card payments, however, it is becoming the norm, as that's what the card company charges the forecourt.

A credit agreement is just that, designed to run for x amount of years, charging x amount of interest, they don't really like you paying it off early, especially THAT early, i think whatever you choose to do, there will be some sort of fee involved, thats why i hate buying cars with anything but cash.

Can you not buy a cheaper car for cash ?

If not, then you may as well take the 2% hit, as its the next best option for you.

I really wish I had taken the 2% hit instead. In the case of taking a cheaper car, the cash payment was extremely small, and what I'm looking for wouldn't be doable at that price point. I'm really in a bit of a pickle since I'm needing a car that's comfortable enough for me due to previous back injuries and what I can afford in cash alone is effectively sub par.

I'm just hoping that when I do get in contact with the dealer when they open back up that they can cancel the finance without there being a penalty to me. I don't think it's fair that they tell me one thing to take out the finance and then it turns out that I'll be left with a long credit agreement with a whackton of interest. I've never had a loan before so it's all a bit new to me.

sourcrates

There is a cooling off period, as with all credit agreements.

You haven’t yet signed the agreement, so there isn’t one in place, it doesn’t exist until signed by both parties, so you have nothing to worry about, there is no penalty for withdrawing from a credit agreement.

It’s a simple case of “ive changed my mind guvnor”.

bazzyb

SolveMyMaze wrote: »

Anyway, the two reps then informed me that I could take out the finance with Black Horse and within 30 days I could immediately pay off the balance of the loan with my interest free credit card and there wouldn't be a 2% credit card fee, nor would I accrue any interest with BH.

The salesmen have given you 2 lots of false information: 1) Black Horse only accept payments by debit card, so you would not be able to do this ( https://www.blackhorse.co.uk/contact/make-a-payment ) and 2) You would accrue some interest, albeit minimal, as you would be charged a daily rate of interest for the time you have the agreement if using your right to withdraw.

If you definitely want this particular car at the price you've already agreed, I would be tempted to go back to them, point out that you've been given misleading information and negotiate that they waive their 2% card fee as a gesture of goodwill.

SolveMyMaze

sourcrates wrote: »

There is a cooling off period, as with all credit agreements.

You haven’t yet signed the agreement, so there isn’t one in place, it doesn’t exist until signed by both parties, so you have nothing to worry about, there is no penalty for withdrawing from a credit agreement.

It’s a simple case of “ive changed my mind guvnor”.

Thanks for the re-assuring information, it's much appreciated. It's just a total pain in the neck having to deal with nonsense like that. I didn't have an issue with paying the 2% and the naivety of me that the dealership was trying to help me get rid of this charge has cost me a bit a stress.

bazzyb wrote: »

The salesmen have given you 2 lots of false information: 1) Black Horse only accept payments by debit card, so you would not be able to do this ( ) and 2) You would accrue some interest, albeit minimal, as you would be charged a daily rate of interest for the time you have the agreement if using your right to withdraw.

If you definitely want this particular car at the price you've already agreed, I would be tempted to go back to them, point out that you've been given misleading information and negotiate that they waive their 2% card fee as a gesture of goodwill.

That's extremely annoying that they've given me the wrong information about daily interest charges.

The car is definitely at the right price point with the mileage on it, as well as the comfort factor. I've actually just sent off an email to the head of the company saying that I have been mislead on two issues with this sale. I doubt I'll hear anything today, but I've got a feeling that he'll pass it down the line that the fee has to be waived.

I already had to tell the salesman to take off the Supaguard (not worth the price their touting) as well as the GAP insurance (I can get it £200 cheaper doing it directly), and he was sound about that so it didn't strike me as though they were doing anything untoward regarding the finance.

Nearlyold

Once the loan is up and running all consumer credit agreements come with a right to withdraw. You must give notice of your intention to withdraw with 14 days (not 30). You then have 30 days to repay the amount borrowed plus accrued interest up to the point you make the repayment - no other fees such as an arrangement fee or option to purchase fee can be charged.

Once you have notified the lender of your intention to withdraw you cannot change your mind (this is to prevent customers being "persuaded" to continue with the loan), this means you must make sure you will have the funds available to repay the loan.

Thrugelmir

SolveMyMaze wrote: »

I won't be taking possession of the car until the 30th December.

After 13th January 2018 it'll be illegal to levy a card surcharge. After the EU directive becomes UK law.

Superscrooge

Car sales staff can earn as much commission from the finance agreement as they do from the sale of the car.

So they are often desperate for you to take out their finance rather than pay using your own credit card

SolveMyMaze

Nearlyold wrote: »

Once the loan is up and running all consumer credit agreements come with a right to withdraw. You must give notice of your intention to withdraw with 14 days (not 30). You then have 30 days to repay the amount borrowed plus accrued interest up to the point you make the repayment - no other fees such as an arrangement fee or option to purchase fee can be charged.

Once you have notified the lender of your intention to withdraw you cannot change your mind (this is to prevent customers being "persuaded" to continue with the loan), this means you must make sure you will have the funds available to repay the loan.

That's really helpful information, thank you. I'm just glad that since the agreement hasn't been signed by me or the dealership, at least it's not live yet. Still, it's a bit of a rubbish situation that they've put me by misleading me about it. If I hadn't done the check online this morning about this, I wouldn't have had a clue about this problem. I just hate the fact that people would knowingly mislead others in order to get a commission from the finance company.

I doubt if I had signed the agreement that the finance company would allow me to withdraw and pay it off via the CC when they don't allow you to settle your account earlier than the 60 months via this method.

Thrugelmir wrote: »

After 13th January 2018 it'll be illegal to levy a card surcharge. After the EU directive becomes UK law.

That's a good heads up, thanks for that. I don't have an issue paying the 2%, it's just really more the fact that they've suggested that I pay it on the finance when they knew it would scupper me.

SolveMyMaze

Superscrooge wrote: »

Car sales staff can earn as much commission from the finance agreement as they do from the sale of the car.

So they are often desperate for you to take out their finance rather than pay using your own credit card

It's just so dishonest that they'd do it though. I've got no issues with someone making a living, but if they're going to lie to me then that's a no go.