Car Finance vs. Credit Card Payment

[MrPea]

Hi folks,

I'm going to get myself a runabout for the summer over the weekend and the cars of interest are all at dealers. I can buy outright but I've read with interest some of the comments on this forum about "always buy a car with at least some finance" so that you can have recourse to the finance company if things go wrong with the dealer in a consumer rights situation.

My simple question is... If I ensure I pay a deposit with my credit card, does that give me the same consumer rights with recourse back to the CC company as if I arranged a finance agreement for the minimum possible loan they'd give me?

For context, I had hoped to be able to run my Saab until Autumn when some personal circumstances will put me in a strong position to get a decent daily driver to last me the next 5 or so years. As the Saab is proving too unreliable my hand has been forced to get a stand-in car for the next few months. I'm still intending to get something nicer come the Autumn.

Thanks for your help,
Stevie

 

[CatmanV2]

I believe so, yes

C

 

[Wack61]

Can't find it now and my memory is sketchy on the details but a couple bought a 30k motorhome, on the advice of their son they paid £100 deposit on a credit card and the rest by bank transfer, the van turned out not to be as advertised, this is the bit I can't remember, cloned, CAT D, outstanding finance , no idea ,they claimed and won in court the 30k back from the credit card company who tried their best not to pay but still had to

 

[midlifecrisis]

I think this was covered by Martin Lewis on TV a while back, if the credit card is used in the purchase then the credit card company is 'involved' and can be used for any legal recourse, even if it's just the deposit. He actually advised that people use their credit cards for this even if they have the money in cash. (Pay off the bill later with the cash!).

 

[dem maser]

Yes my friend did the same, bought a BM for 3k but paid £200 holding deposit via credit card, remember asking why.....

 

[zagatoes30]

Paying some of the price on Credit Card opens up all the protection that is often built into these payment types. We just paid for our 5 week trip this summer and even though we had the money in the bank we put 25% on the credit card which we then paid off to trigger these protections.

 

[MrPea]

Thanks for all your input and reassurance on this one. I'll try and pay as much as they'll let me on CC (so I get points!)

 

[Jkulin]

Yep Stevie, the same happened with my Maser, put a big chunk down as a deposit and the rest on finance, was covered by the Consumer Rights Act 2015, they ended up paying about £8500 for the repairs and they will sue the dealer for the balance.

 

[ChrisQP09]

Recently I've pondered about a nicely spec'd Alfa 159 (Nero Carbonio w/Tan interior) but not sure on their reliability. Although I am thinking about going a dealer route and paying by cc for the deposit.

 

[Contigo]

Big article in the Daily Fail about pcp saying it's cheap credit and that the bubble is going to burst similar to sub prime lending back in 2008/09.

 

[Contigo]

www.dailymail.co.uk/debate/article-4513190/amp/Gleaming-cars-road-spark-financial-crash.html

 

[MrMickS]

www.dailymail.co.uk/debate/article-4513190/amp/Gleaming-cars-road-spark-financial-crash.html

Typical journalistic piece based off a report that they don't really understand. As an example:

Of course, interest rates will eventually have to rise, leaving huge numbers of borrowers in trouble as they struggle with higher repayment costs.

PCPs, like other loans, have the interest and payments fixed at the onset of the agreement. Changes to interest rates will make no difference to repayments. Let's not let facts get in the way of a good story though.

The more general point of people buying cars that they can't afford is worrying. In the end though people shouldn't take out credit that they can't afford. This isn't a new thing and people, as well as government and institutions, should have learnt this by now.

 

[ChrisQP09]

If the Daily Mail says so lol. In all honesty though, finance deals have got stupid. I recall when I got my QP on finance it was ******** hard to get Ferrari FS to attain me, even with repayments being around 18% of my monthly net. Some brokers and finance houses though are giving credit away like popcorn

 

[Panicracing]

Purchased a Merc daily driver back in March. £200 cc deposit £15k by bacs a week later. I use cc for a lot of higher value purchases to get cover and just clear in full when due. Get a cashback deal as well. I would have paid in full on cc but dealer was moening about commission he is charged.

Sent from my LG-D855 using Tapatalk

 

[redsonnylee]

All my cars have been purchased with a CC deposit. If the dealer charges a handling fee for the balance then I use a debit card. I also do this for large purchases as the CC company cover a few appliances on a warranty.

 

[D Walker]

Typical journalistic piece based off a report that they don't really understand. As an example:



PCPs, like other loans, have the interest and payments fixed at the onset of the agreement. Changes to interest rates will make no difference to repayments. Let's not let facts get in the way of a good story though.

The more general point of people buying cars that they can't afford is worrying. In the end though people shouldn't take out credit that they can't afford. This isn't a new thing and people, as well as government and institutions, should have learnt this by now.

Couldn't agree more - Debt has always been a dirty word, I know of a couple who remortgaged to buy a car, I tried to dissuade them but they went ahead. Looked good in their Range Rover mind!!

 

[rockits]

Would paying a deposit on a VISA debit card give the same protection as paying using a VISA credit card?

 

[Contigo]

Would paying a deposit on a VISA debit card give the same protection as paying using a VISA credit card?

No! Section 75 protection only applies to credit cards.

 

[midlifecrisis]

Couldn't agree more - Debt has always been a dirty word, I know of a couple who remortgaged to buy a car, I tried to dissuade them but they went ahead. Looked good in their Range Rover mind!!

With mortgage interest rates being around 3% say, they are a lot lower than the 5-8% for a personal loan. So very wise indeed, especially if they have plenty of equity.

 

[D Walker]

With mortgage interest rates being around 3% say, they are a lot lower than the 5-8% for a personal loan. So very wise indeed, especially if they have plenty of equity.

Nope, but they have a range rover worth half (ish) its original value and probably 90% of it to pay for over the next however many years on mortgage....