Buying a car by bank transfer - good or bad idea? 19 July 2022 at 3:00PM in Motoring 32 replies 1.1K views

Britannia12345

I've found a car I really want to buy and I'm having an RAC check being done on it tomorrow which is costing £256. The car is at a dealership. 
I've looked at so many cars and so many different dealerships over the last few weeks my head is swimming with information, and I forgot to ask this dealer if they accept credit cards. I just asked them and they only do bank transfer. 
Is this safe? I had the intention of paying by credit card in case something went badly wrong with the car and I'd have more comeback. 
How does everyone else pay? I haven't bought a car in years. 

user1977

The only times I've bought, it's been by debit card. I suspect most places don't want to pay the commission on credit cards.

Penguin_

I wouldn't pay by Bank Transfer. Any reputable dealer should be able to take card payment.

SiliconChip

Most dealers won't allow full payment by credit card because of the fees they have to pay, although it's a good idea to use one for a deposit, as that will give you the Section 75 cover for the entire cost, and many dealers will allow that. If it's an established dealer then payment by bank transfer is pretty safe. Is the dealer local to you? One issue is that if the payment doesn't go through on the same day and it's not a local dealer then you may have travelled a long way and have to decide whether to go home and come back the next day or stay overnight, both of which are extra expenses.

Britannia12345

It's in the north of England and I'm down south which is why I was getting the RAC to check the car over for me and then it's being delivered if I buy it. I'll ask them if they'll take the deposit by card. 

Herzlos

I think it's pretty common these days because of the fees. How big is the dealership? Does google street view show you if it's been there for a while?

Car_54

Penguin_ said:

I wouldn't pay by Bank Transfer. Any reputable dealer should be able to take card payment.

Every reputable dealer I've bought from accepted debit cards, but not credit cards for the reason already mentioned.

Sandtree

Herzlos said:

I think it's pretty common these days because of the fees. 

Is common for them to refuse to allow you to pay the full amount by credit card because with traditional merchant accounts they charge a percentage and so the fee can be notable... most do however accept a deposit by credit card.

Debit cards are normally accepted because traditionally it was a flat fee, which is also why companies will do cash back with debit card but not credit cards, and so a few pence against the value of a car is acceptable.

Britannia12345

Herzlos said:

I think it's pretty common these days because of the fees. How big is the dealership? Does google street view show you if it's been there for a while?

Just checked and it was there 2 years ago. 

Britannia12345

I asked if I could pay the deposit by card but they said no card payments at all 

Sandtree

To answer the original Q... bank transfer is safer now that it used to be because of the process of validating the name of the account holder so much less risk of a rogue employee giving their personal account (as one poster once claimed a travel agent did), you miskeying it or them saying the money never arrived. 

There is still the fundamental issue that there is no mechanism of recall so if the car fails to turn up with a debit card you could have done a chargeback but no such mechanisms exists with BACS/Faster Pay.

There aren't really many other options, in theory you can use escrow type services but unless you are buying a Ferrari it'd be massively cost prohibitive and still only ensures you get the car and they get the money... could still be it turns out to be a lemon and they are terrible to try and deal with.