Make final car PCP payment with a credit card?

IdéeFixe

I have a car on a PCP finance plan which will have an optional final payment of about £15k in approximately 3 years. I would prefer not to spend that much money all at once. Is there any easy arrangement I could make with a credit card such that I'd pay with credit and then spread the repayments out over a low interest or zero interest introductory term? Or is a personal can loan from the bank an option? Any downsides to those rather than just settling it all in cash?
(note I do currently have a credit card with a £15k limit, so presumably I can get another one)

[Deleted User]

You'd need to get a card with a money transfer option. The fee will be around 4%.

Any finance option will have downside of costing you more than if you pay cash.

[Deleted User]

I wouldn't presume anything, a 15k money transfer card might be a bit optimistic in current climate, depending on your salary, previous credit history etc

born_again

PCP usually takes final payment by the same DD as the rest of the payments. Given the fee involved I would think that paying via CC for the balloon payment is something that the finance co will not be willing to do. 

eskbanker

IdéeFixe said:

I have a car on a PCP finance plan which will have an optional final payment of about £15k in approximately 3 years. I would prefer not to spend that much money all at once. Is there any easy arrangement I could make with a credit card such that I'd pay with credit and then spread the repayments out over a low interest or zero interest introductory term? Or is a personal can loan from the bank an option? Any downsides to those rather than just settling it all in cash?
(note I do currently have a credit card with a £15k limit, so presumably I can get another one)

A bit late now for you of course (but maybe of use to other readers), but if you wanted to avoid a substantial final payment, wouldn't it have been better to have used a single cohesive financing arrangement closer to what works for you (such as a bank loan from day one), rather than being faced with trying to fit two different ones together?

IdéeFixe

Thank you for the advice.

A single loan for the full amount would have taken away the option to return the car. Also I don’t think I could have got as good a deal in terms of fees/interest as the PCP plan (it is 0% interest).  I don’t mind making the balloon payment if I decide to keep the car, but finding a way to spread it over time would leave me more cash in hand for other matters.

Sandtree

IdéeFixe said:

A single loan for the full amount would have taken away the option to return the car. 

If it was an independent loan then it wouldnt but it was a HP then you have a right to cancel once you've paid half the finance.

It sounds your 3 years out so a bit early to be considering options as we've no idea what the credit market will look like then. In principle you could get a personal loan, or possible a credit card with a money transfer option, to pay the balloon if you decide to retain the car. Its unlikely that a finance company would accept a direct payment from a credit card for the balloon. 

[Deleted User]

IdéeFixe said:

Thank you for the advice.

A single loan for the full amount would have taken away the option to return the car. Also I don’t think I could have got as good a deal in terms of fees/interest as the PCP plan (it is 0% interest).  I don’t mind making the balloon payment if I decide to keep the car, but finding a way to spread it over time would leave me more cash in hand for other matters.

An alternative would be a BT card and put your normal day to day spending on card and BT them every month or so and pay off over time, thus freeing up your day to day cash if you're worried about short term cash flow

maxximus75

You could alway put £416.67 in a savings account each month so you would have the entinre baloon payment if you decided to keep the vehicle?

[Deleted User]

maxximus75 said:

You could alway put £416.67 in a savings account each month so you would have the entinre baloon payment if you decided to keep the vehicle?

That is the obvious and correct answer, but the number of posts on here by people who seem to have got to the end of their PCP without a clue as to how they would pay the balloon suggests that a lot of people don't understand the PCP process.

born_again

Deleted_User said:

maxximus75 said:

You could alway put £416.67 in a savings account each month so you would have the entinre baloon payment if you decided to keep the vehicle?

That is the obvious and correct answer, but the number of posts on here by people who seem to have got to the end of their PCP without a clue as to how they would pay the balloon suggests that a lot of people don't understand the PCP process.

That is because they simply expect to get a new car at that point.
Probably the same people that are always hunting for 0% balance transfer cards as they have carried on spending rather than pay off the balance within the transfer period.

Sadly Covid has made many people realise that you can not rely on credit to pay your way in life.