Buying a car with a 0% credit card

Tickle71

Hi, I need to replace my car and don't have the savings to buy, so I was thinking of maxing out my 9k credit card that is still in a 0% deal to buy a used car.
Can I pay for a used car at a garage and then when my 0% deal is about to run out, transfer the balance to a new card with a 0% deal?

cymruchris

Tickle71 said:

Hi, I need to replace my car and don't have the savings to buy, so I was thinking of maxing out my 9k credit card that is still in a 0% deal to buy a used car.
Can I pay for a used car at a garage and then when my 0% deal is about to run out, transfer the balance to a new card with a 0% deal?

Two points - firstly a few dealers do take credit cards - but a large number (particularly smaller ones) do not. So unless you find a car somewhere that does take credit cards, you might find this difficult. Secondly, you might not get another card with a 0% deal that offers the same credit limit. 

If you did manage to find a dealer that took cards, and you then max'd out the card - how would you deal with the debt when incurring interest if you couldn't get another 0 percent card? (Bearing in mind that the number of 0 percent deals aren't as great as they were, the fees involved have generally gone up, and the criteria to be eligible for one have also been tightened). 

What's the regular APR on your credit card? You might be better looking at a loan eligibilty calculator to see what APR's you might be likely to get. Do you have to spend all £9k?

Cloth_of_Gold

Another thing is that it used to be the case that even those dealers that did take CCs would often only take up to a certain amount on them, usually £2 - 3K. If you fine one that does tak CCs you might want to cjeck first if they have a maximum they will take. Cymruchris's points are all very good though.

retiredbanker1

OP You state that you have no savings indicating money is tight - loading yourself with up to £9k of debt might not be the best way forward.
Where will the repayments come from?  What if you are unable to clear the debt before the end of the 0% term?

SiliconChip

I've recently bought a car from a Toyota main dealer who would only take up to £2000 on a credit card (I actually paid £500 deposit and did a faster payment for the £14K balance, plus trade in). I doubt if you'll find many, if any, dealers who would take as much as £9K on a credit card.

CliveOfIndia

SiliconChip said:

I've recently bought a car from a Toyota main dealer who would only take up to £2000 on a credit card (I actually paid £500 deposit and did a faster payment for the £14K balance, plus trade in). I doubt if you'll find many, if any, dealers who would take as much as £9K on a credit card.

Yes, this is very common.  The issue is that the dealer (just like any other retailer who accepts credit cards) has to pay a fee to the card issuer on every transaction - and the fee is calculated as a percentage of the transaction value.  So up to a point (say £500 or £1000 or whatever they decide), the fee they pay is manageable, and arguably gets them a few more customers than if they flatly refused to accept cards at all.  But when the transaction value is several thousand pounds, the fee becomes reasonably significant for them, and eats into their profit margin (which, if you believe what they say, is much tighter these days than it used to be !).

In the olden days (i.e. when I was young), they'd all accept cards - but they'd pass the fee on to the customer.  They're not allowed to do that any more, so they'll either place a limit on the amount they'll accept by card, or else flatly refuse to take cards at all.

Slightly off-topic, but many many years ago I remember I deliberately paid by card to earn points.  It's that long ago I can't even remember what the points were, or it may have been cash-back.  I did my homework beforehand and it worked out that the reward I got back was more than the fee I had to pay - unlikely as it sounds !