Paying For Car With Credit Card

[Mr_Mojo]

I should be taking delivery within the next month or so of a new W204 C220. I'm planning paying cash for the car but in last weeks Sunday Times American Express were advertising their Platinum credit card which has 3% cashback on all transactions in the first three months. If I used this I could get just over £1k back!

Has anyone else used a credit card to buy a new car and had no problems with the dealer? Not checked with the dealer to see if they would except card payment yet though. As long as American Express give me a high enough credit limit and I can use the card seems a good deal?!

 

[Bobby Dazzler]

Do check with the dealer. The charges they'll face might put them off. They'd probably be OK with a debit card though.

 

[Deleted member 6183]

I considered doing the same but for different reasons.

I am waiting to collect my new car and, being impatient, I thought of putting the remaining balance on my card to avoid waiting for the funds.
The downside is that the dealer is likely to charge you 3% of the transaction which will wipe out your 3% cashback.

I wish I had the same c/card deal though as I'd happily pay 3% then earn 3% for a faster delivery date!
Mine gives no cashback.

If I get time I'll post my hilarious dealings with a main dealer finance guy, there must be some serious mugs out there to do the deal that he offerred.

 

[A210AMG]

Hello

I've done this a couple of time however a credit card not a debit, if you can use your method it sound like a good deal

 

[IanA2]

Do they take Amex? Many don't. I gave up with Amex years ago. Not much use in this country.

 

[joe]

I also had the same idea with a cash back card.....but the dealer advised they would charge for using a credit card...although they will take a few £K without a problem.

Joe

 

[fuzzer]

No dealer will accept over £5k on an amex or any other type of credit card without charging you a fee to cover the 5% they get charged from amex.

expect to pay in the region of 3.75%

 

[SG CL500]

dealer allowed me to put 5k max on a credit card due to charges - rest had to go on a debit card

 

[Mudster]

American Express charge enormous commissions (so do Diners Club) which is why I take neither of them. Also fraud is rife, so the days of buying a car on credit card are gone (same as walking in with a bag of cash - you can only pay a maximum of £5000 in cash on a new car AFAIK).

 

[GrahamC230K]

I reckon the dealer will charge at least 2% for a CC transaction that size.

 

[jeremytaylor]

It's much easier paying by debit card than having an electronic transfer, in my experience. Even high amounts go through straight away, it seems!

 

[crockers]

I've bought my past 3 cars with a Debit card - I always phone the bank first to make them aware ...

 

[MikeL]

Tried to pay for BMW service with Amex:

'Sorry, we don't accept American Express'
Point out that the BMW Card is American Express.
'They charge too much'

Go figure.

Mike

 

[fuzzer]

Tried to pay for BMW service with Amex:

'Sorry, we don't accept American Express'
Point out that the BMW Card is American Express.
'They charge too much'

Go figure.

Mike

thats weird , i always pay with amex in the bmw garage :S

 

[Bobby Dazzler]

thats weird , i always pay with amex in the bmw garage :S

It will be up to the Franchisee and the merchant they use.

Few McDonalds used to accept cards, but there are loads with banners up adertising that they now accept cards, so it seems that Franchisor is maybe insisting on it now?

 

[Bobby Dazzler]

I paid for a car on a credit card some years ago, and the dealer didn't charge me. I did it because of the joint liability between the credit card company and the seller - offered me greater confidence.

If I was to buy an cheap and cheerful car, I would probably agree to pay a small premium to put it on a credit card if required - for that extra protection.

That said I've seen a few adverts for traders specialising in low value cars, that state that they welcome credit cards. Probably build the cost of the transaction into the cost of the car - credit cards are easy finance for some people, and the easier it is for the customer to buy a car, then the easier it is for the vendor to sell the car.

 

[Mudster]

Commission rates aren't enormous if you have a decent turnover. If you look at the bottom of your Tesco receipt next time you shop, you'll see Tesco Bank charges Tesco 2.5%.

I pay less than half that, and I'm not threatening Tesco in the turnover stakes! (this is just deal Tesco have with their own bank.....tax loses etc etc)


I doubt very much most big dealers will be paying more then 1% for regular cards (visa or MC) Amex will be double or treble, it's just a status symbol in theory, but in practice (or unless you visit the states a lot) it's an impractical card in the UK.

Debit cards on the other hand charge a flat fee for the transaction irrelevant to transaction size, say 18 pence.

But mainly the reluctance to take credit cards is the fear that the dealer/Business gets hit by chargebacks. (where the cardholder claims fraudulent transactions or disputes the transaction)

The largest card transaction I took was for £17,000.....within 5 minutes I had my bank and the card processor on the phone having kittens ( I happened to know the customer, well, He was listed in the Top 100 wealthiest Brits, so on that basis it was hardly likely to be a problem)...The only truly secure form of payment is direct bank transfer, which is mostly how I operate, it also happens to be the cheapest form of payment.

I now have to pay a percentage "handling fee" to pay cash into my business account, this means it now actually costs more money for me to accept cash than a cheque.

 

[Dryce]

Commission rates aren't enormous if you have a decent turnover. If you look at the bottom of your Tesco receipt next time you shop, you'll see Tesco Bank charges Tesco 2.5%.

I pay less than half that, and I'm not threatening Tesco in the turnover stakes! (this is just deal Tesco have with their own bank.....tax loses etc etc)

My recollection is that this is/was a VAT scam by big retailers to avoid paying VAT on the 'charge'.

Sounds small: 17.5% on 2.5% but it gives you an extra margin of 0.4% - which if you are making say 7% average margin raises your profits by over 6%.

 

[Mudster]

Sort of, in reality it means they can operate their own bank, charge themselves inflated bank charges on which they claim tax relief (including vat). But then effectively keeping the bank charge through another business.

I don't actually think the card providers can charge vat on the commission, I just took a look at my last Streamline statement and the only vat charge was for the machine rental itself.

 

[IanA2]

Sort of, in reality it means they can operate their own bank, charge themselves inflated bank charges on which they claim tax relief (including vat). But then effectively keeping the bank charge through another business.

Exactly.