Looking to buy a car with a credit card

Kachaka

I am looking to buy a car with a credit card because some cards have 0% interest for 25 months which I think is better than a cheap personal loan of 3-3.4% interest rate! 

Is that information that I have correct and what credit card do I need to apply for? Checked my Experian credit rating and is 994 points (almost maximum)

TadleyBaggie

I assume you are purchasing from a dealer? Bear in mind that many dealers will not welcome credit card transactions due to higher charges.

MrFrugalFever

I’d be surprised if any car dealer will allow more than £5k. You might be better off searching for a money transfer card, such as MBNA and doing a soft search eligibility check direct with them.

MalMonroe

First of all how much is the car you want?

Then, are you sure you will be able to get one of the 0% interest cards over 25 months? After applying, some lenders change the limit as well as the time given to repay.

Also, credit scores mean nothing to anyone, nobody ever sees them, except you. Your credit history is the important thing. And it's always a good idea to check all your reports, not just that of Experian but also Equifax and TransUnion.

There's some info here about buying a car with a credit card - 

https://www.moneyexpert.com/car-finance/how-to-buy-car-with-credit-card/

(Note - it's from money expert, rather than money saving expert).

It can be done. It might be a good idea to ring around a few dealers to see which ones accept payment by CC.

I did once buy a car and paid the full amount by credit card. It was an old car and wasn't very expensive at all but it ended up going pear shaped and I ended up applying for a Section 75 refund. Not that I'm saying that will happen to you but just take care out there! (I got my money back plus compensation but it took 18 months)

I'd advise you to shop around for both a car and a credit card and do a soft search to test whether or not you will have a good chance of being accepted or not. It's best if you do that yourself because the recommendations for credit cards we give on here may not be available for you.

I wouldn't advise buying a car from any place other than a dealer, either because you can at least get your money back if it all goes wrong. I have learned from experience. 

Good luck! Hope you find what you are looking for.

Kachaka

The cars that I am looking are from a dealer. My budget for a car is £12,000 max but I can contribute £2-3000 as a deposit. I will start do soft searches for some CC and if I am approved then will ring the major dealers like arnold clark to see if they accept or has any charges.. 

SiliconChip

Kachaka said:

...will ring the major dealers like arnold clark to see if they accept or has any charges.. 

They are prohibited by law from making any charge for paying by credit card, which is why you're unlikely to find any dealer that will allow you to pay the full amount by credit card as they can't pass on the charges that they have to pay. You may need to rethink your plan.

Ebe_Scrooge

SiliconChip said:

Kachaka said:

...will ring the major dealers like arnold clark to see if they accept or has any charges.. 

They are prohibited by law from making any charge for paying by credit card, which is why you're unlikely to find any dealer that will allow you to pay the full amount by credit card as they can't pass on the charges that they have to pay. You may need to rethink your plan.

Exactly this.  Any retailer who accepts payment by credit card has to pay a fee to the card company on every transaction, calculated as a percentage of the transaction value.  If the transaction is a couple of hundred quid then the fee is usually acceptable to the retailer, especially if it means they get more business.  When the transaction value is several thousand, the fee becomes significant.

Many years ago, car dealers would usually pass the fee on to the customer if they wanted to pay by credit card.  The law was changed some years ago to make it illegal for a retailer to charge a fee for credit card payment.  But since the retailer still has to pay the fee to the card issuer, most dealers simply refuse to accept a card for anything more than a small deposit (which will give you S75 protection).

All that aside, depending on your credit history (ignore the meaningless score), I think you'd be lucky to get a card with a sufficiently high limit to allow you to put the full value on it anyway.

[Deleted User]

Money Transfer card with 0% interest is going to be your best bet to part finance, put the deposit on CC for S75 cover (even 1p, but typically £500 is normal) and see what you can get for the MT offer if you want to part pay. I would say almost 100% you a) won't get a card with that limit from scratch and b) the dealer won't want to take the hit of merchant fees