Does paying £99 reservation/deposit with credit card provide s75 protection?

highnoon888

Hi all,

Buying a used car and will be getting a bank loan so I can own the car outright. HP APR is 10%, bank APR is 5.9% which I'm happy with.

I have seen a strong recommendation online from people that you should use a credit card for some portion of a car purchase because you then get covered by s75 protections.

My question is, I have just paid the £99 reservation/deposit with Arnold Clarke using a credit card, does this count as s75 protection, or do I need to actually pay a portion of the rest of the car using my card and get them to split the final payment between like £100 on card and the rest cash (funded by my loan)?

born_again

What is the cost of the car?

1p would be enough for S75 so long as purchase is over £100 to £30,000

S75 is not a cover all insurance on your purchase.

rsvtoddy

Yes - from the Money helper website -

For example, if you bought something costing £200 but paid a deposit of £20 on your credit card and the rest by other means (eg using a debit card or cash), you would still be covered and you would be able to claim the whole £200 (and not just the deposit) from your credit card company if the goods didn’t arrive or were faulty.

highnoon888

Thanks both. The car is c. £24K so falls within that. Not intending it to be a cover all insurance, rather, if its an easy enough extra piece of mind for no hassle then might as well do it. 

So it sounds like it would count. I just wasn't sure if the £99 "refundable deposit" is actually part of the same purchase of the rest of the car and not a separate transaction as far as the regs are concerned. 

CliveOfIndia

As long as you pay any amount by credit card (even 1p, in theory), then you benefit from S75 protection.  Subject to the total cost of the car being between £100 and £30,000.

But do remember that S75 is not a magic panacea.  It's a useful added extra, but basically only covers you where the supplier has breached the terms of their contract and won't reimburse you - for instance, if they don't supply the car you ordered, or go out of business between you paying the deposit and your agreed collection date, car not fit for purpose, that kind of thing.

For insurance against mechanical problems, outside the terms of any warranty you've been offered - that's a whole different kettle of fish, and can be a right minefield.  That's where it comes down to the exciting task of reading the nitty-gritty of what's included and excluded from any warranty agreement - whether provided by the garage or a 3rd-party.

Arunmor

The dealer may want to refund your deposit and it to the price.