Reducing PCP while travelling

jackpady

Hi everyone. I'm after some advice. I'm going backpacking with my partner for 8 months in October so I'm looking to minimise my financial commitments while I'm away and not earning anything.My employer has granted me a sabbatical so I still have a contract of employment and will have a job to go back to, but still it is unpaid leave.

As we are renting and giving up our flat, my biggest expense will be the PCP payments for my car - about £120/month until November 2020. I have asked the finance company but they don't do payment 'holidays', and unhelpfully suggested I make a lump payment before I go to cover my payments until after I return - no net reduction in spending.

So my next thought was to pay off the balance of the PCP (currently about £1800) on my Halifax Clarity credit card, and then apply for a '0% for x months' and transfer the balance. Therefore, as I understand it, I would only have to pay a transfer fee, and then minimum payments for the 8 months I'm away to keep the 0% rate, before paying the balance off in full over the following few months, still within the 0% period.

This would mean I pay far less than the £120/month while I'm away, without adding hugely onto the balance I have to pay to the lender (CC company instead of PCP finance company). Can anyone spot any obvious (or not so obvious) flaws in my plan? Thanks in advance for your advice.

[Deleted User]

The suggestion from the finance company wasn’t “unhelpful” as you implied, it just wasn’t beneficial for you.

As for flaws - you need to be certain that a. the finance company accepts credit card payments, b. the credit card sees it as a purchase rather than a cash transaction and c. you can indeed get a BT card with the required limit.

If the finance company do take card and the transaction is deemed as a purchase rather than cash then it would probably be better to apply for a 0% purchase card first before finding out you cannot get a BT card with the required limit.

MisterBaxter

I suspect that the finance company won't take payment by credit card which leaves you having to draw cash on your Clarity card before transferring to a 0% card. You'll pay fees on the cash transaction and a fee on the balance transfer.
You could look at a personal loan but for the amount you are after I suspect the interest rates could be quite high, it may still work out to out to have lower monthly payments though.

NoodleDoodleMan

The suggestion from the finance company wasn’t “unhelpful” as you implied, it just wasn’t beneficial for you.

Correct.

If you enter into a finance agreement contract you have to honour it.

The finance company are not doing anything unreasonable.

chattychappy

!!! wrote: »

The suggestion from the finance company wasn’t “unhelpful” as you implied, it just wasn’t beneficial for you.

Actually that's pretty much my definition of helpful... something that's somebody's doing that's beneficial to me.

Whether somebody has a "duty" to be helpful is another matter!

Alexd52

Your best option would probably be a 0% money transfer card, this would allow you to transfer into your bank account to pay the pcp off. (getting over the issue as to whether the finance co will accept credit cards or not)
It's worth carrying out some eligibility checks on the main site

southantrim3

Check the early repayment charge (ERC) re PCP, that would be the main thing.