Credit Card for paying deposit on new car?

rob3770

Hi,

Here's the plan...

I plan on buying a new Citroen C1 in November for £8000
If i can find 35% deposit the rest is intrest free from the dealership.

I could get an Abbey loan for the £2800, but...

Can i pay the amount on my exsisting card (Capital One platinum), get another card and do a balance transfer of the whole amount?

YorkshireBoy

rob3770 wrote:

Hi,

Here's the plan...

I plan on buying a new Citroen C1 in November for £8000
If i can find 35% deposit the rest is intrest free from the dealership.

I could get an Abbey loan for the £2800, but...

Can i pay the amount on my exsisting card (Capital One platinum), get another card and do a balance transfer of the whole amount?

The short answer is yes - in theory at least.

However, you (and your new card provider) need to know that your credit history is good and your finances will support the additional borrowings.

Some things to bear in mind...

1. Your current credit worthiness (electoral role, employment, salary, time at current address, etc)
2. Your current debt/income ratio.
3. Your debt/income ratio once you've signed up for the finance for the car.
4. If you've been "pre-approved" for the Abbey loan, they may have done a credit search on you. This search, coupled with the 3 years car finance and your existing borrowings may cause alarm to any future credit card provider in that you may appear to be a desperate borrower.
5. The new card provider may charge for the BT - depending on who you go to.
6. The dealer may want to charge a fee for the deposit payment made on the card as he may be charged a 2% merchant fee.
7. If there's any delay or problem with the new card, and you can't get the loan, you have £2,800 on 15.9% for as long as it takes to pay off.
8. Jeremy Clarkson said on Top Gear recently that the C2 offered better value for money (OK then, this bit is not really answering your question )

Bossyboots

My dealer accepted my deposit by CC free of charge but not the balance. However, we know our dealer and he only took a £250 deposit on a £6000 car so he said he could absorb the charges for using the CC for the deposit.

Rafter

Because car dealers normally get charged a big fee by the credit card company (because the credit card company is then jointly liable if there are any problems with the car or dealer) you might find this tough.

The key is getting the funds from your credit card to a current account to pay the deposit or finding a card company that issues credit card cheques that are free to use. Under both scenarios, you lose the 'guarantee' you get when paying for goods with a credit card though. However, with a main Citroen dealer you should be fine.

Getting money to a current account requires you to make a 'super balance transfer' something which is getting much harder to do, but still possible with some MBNA products and an Egg card. Mint were offering fee free cheques at one point but not sure what the situation is now. Best to cheque terms and conditions with each bank first.

Otherwise you need to swallow the 2%+ fee you might be charged (which still works out cheaper than a loan, unless you were planning to repay in a very short period.)

Good luck.

R.

YorkshireBoy

Rafter wrote:

Mint were offering fee free cheques at one point but not sure what the situation is now.

Clariman has posted recently that the Mint cheque fee is 2% (£40 Max) in the first 3 months. After that, they are free (but this would be too late for you). As always, do your own research.

Cumbrian_Male

YorkshireBoy wrote:

Clariman has posted recently that the Mint cheque fee is 2% (£40 Max) in the first 3 months. After that, they are free (but this would be too late for you). As always, do your own research.

Do you have to have the citroen C1?

Fiat are doing nil deposit and 3yrs 0% finance till 30 Sept.
HERE

How about a Punto?

PeeWee

I hear the car market is slow, tell the dealer you will only buy it if he absorbs the 2% fee on your deposit, if he says no he cant, walk out, I reckon he will shout you back after "talking to his boss"

I did it, albeit a smaller deposit, and they usually wont risk losing a sale for 2* of the transaction.