Paying Car Finance with Credit Card or Loan

SR06

Hi all,

I have car finance with Volkswagen Financial Services (UK) Ltd. I'm looking into options of getting a 0% interest credit card or bank loan to pay off the remaining balance, as the interest on the car finance is much higher.

Anyone with experience in doing this?

The remaining balance is £11,500. Assuming I could get the full amount on a 0% interest credit card, is there anything preventing me using that to pay off the car finance?

Thanks in advance

BoGoF

Probably the fact they are unlikely to take a credit card payment.......have you checked?

MallyGirl

you need to ask the finance company if they accept CC payment.
More importantly you need to find out if such a payment would be treated as a cash transaction or a purchase. If cash then it won't qualify for the 0% purchases promo rate.
You cannot balance transfer a loan.
The other option is to try for a 0% money transfer card - it puts the money in your account so you can spend how you like, but it usually incurs a one off fee of (typically) 3%.

SR06

They (VW) are saying that they would accept a credit card payment, but any payment greater than £5,000 can only be made by bank transfer.

Terry_Towelling

SR06 wrote: »

They (VW) are saying that they would accept a credit card payment, but any payment greater than £5,000 can only be made by bank transfer.

So, you would need to make 3 separate payments by credit card to cover the amount outstanding.

The problem then will be how VW Financial Services processes the transactions through their card processor. Their profile, according to Companies House is either as a vehicle leasing business or as a financial intermediary. I would guess that card transactions processed by this company would not be profiled as cash transactions, so you may want to ask them about this.

The next problem will be the view taken by your own card issuing company as to what it regards as 'cash' or 'cash-like'. You would need to refer to the T&Cs of your card to get this information. Again, I would guess that your issuer would not view these transactions as 'cash' or 'cash-like'.

You could try a low-value payment to see how it is treated on your statement. That would limit any damage done if it were to be treated as 'cash'

SR06

I've decided to apply for a personal loan instead to pay off the remaining balance.

Thank you both for your help.