Do Car Dealers Accept Credit Cards in the UK in 2022?
Written by, Marija Petkova
Updated August, 25, 2022
You’ve done your research and found the perfect car for your needs—but there’s just one problem: you don’t have enough cash on hand to buy it outright.
So you are looking for an answer to the question: ‘Do car dealers accept credit cards in the UK?’ The answer is yes, and we tell you all about it below.
Let’s strap in!
Can You Buy a Car With a Credit Card in the UK?
Yes, certain UK car dealers allow you to pay for a car with a credit card, and they market it as a convenient method to quickly buy your dream vehicle.
In addition to the ease of cashless payment, such a credit card purchase comes with additional benefits but also some drawbacks, like paying higher interest rates.
However, buying a car on a credit card is not an option available with some car dealers as they want to avoid the typical card handling fee. Also, your card might not have a high enough limit to allow you to purchase an expensive vehicle in one transaction.
Using a Credit Card to Buy a Car in the UK
The process to buy a car on a credit card includes the same standard steps as any cashless purchase: your lender pays the total sum outright as you swipe the card, and you have to repay that amount in orderly payments over a specific time period.
Moreover, unless you are able to find and successfully apply for a 0% interest card (which is a rare opportunity), you will most likely have to pay interest charges on the outstanding sum and even penalty fees, provided you fail to settle your debt on time.
Ultimately, if you cannot access 0% or low-interest cards, you should finance your purchase differently as the standard credit card interest varies between 10% and 15%, which is significantly more than that of a standard loan.
Note: Some car dealers who accept credit cards limit the amount you can pay with a credit card, thus requiring you to provide the remainder with another payment method.
Pros & Cons of Buying a Car With a Credit Card
When buying a car on credit in the UK, drivers should consider the various pros and cons included with the transaction to determine if its the right financial decision for them:
| Pros: | Cons: |
| Initial 0% interest—certain card companies offer 0% interest products that allow you to pay off the vehicle without any finance on top; Cashback and other rewards—a massive car bill comes with a slew of card rewards, such as cashback, air miles, nectar points, etc.; Consumer protection—when buying a car with credit card payments you may be entitled to a refund even if the dealership goes out of business. | Credit card limit—some credit cards come with a purchase limit that prevents you from paying the full car price upfront; Purchase surcharges—some dealerships may require you to pay an additional surcharge if you use a credit card for your purchase; Late payment rates—if you are late on your payments or miss the repayment period, you can expect to pay significantly high late fees. |
Note: Customers may need to provide additional documentation when using a credit card to purchase a car, such as proof of identity, residency, and income.
When to Pay for a Car With a Credit Card?
Buying a car on a credit card is the recommended payment method in a variety of situations:
- You can obtain a 0% interest card—using a card with no interest is like borrowing money free of all charges, so take advantage of any 0% promotions as soon as possible;
- You have a high credit limit—your excellent credit score allows you to pay the full vehicle price upfront;
- Before proceeding, you should learn more about what represents a ‘Good’ credit rating to purchase a car in the UK.
- Your card offers purchase benefits—with every purchase you get access to travellers’ miles, cashback points, shopping discounts, and more;
- You don’t have any outstanding debts—you are free of debt, so you are able to repay your car debt on time;
- You want to become the outright owner—with a credit card purchase you provide the entire payment upfront, so the vehicle registration will be in your name.
Note: When deciding to buy a car with a credit card, carefully consider whether or not you can repay your debt on time, as it can become expensive to keep up with late payments. For reference’s sake, the credit card debt of UK residents has surpassed £60 billion recently.
Alternative Options to Buy a Car
If you are unable to pay for a car with your credit card, or you don’t want to own the vehicle outright as you upgrade to a new one regularly, you can consider other ways to get a car:
- Personal Loan—if you cannot get a low-interest card, get a standard personal loan and pay the vehicle in a single lump sum as they come with more reasonable interest rates;
- Did you know? 25% of Brits take out a loan to buy a car!
- Personal Contract Purchase—you will have to provide an upfront sum and monthly deposits after that to pay the difference between the vehicle’s starting price and its estimated used cost after a period of time;
- You can also get full ownership of the car by paying off the remaining cost.
- Personal Contract Hire—this long-term rental option that will only require you to pay smaller rental payments each month for the use of the vehicle;
- Hire Purchase—with an HP plan, you pay an initial deposit and make monthly payments until you repay the total car price, at which time you get full ownership.
Note: When choosing a car payment method, consider your current income and whether or not you can access other forms of revenue, such as inheritance, online sales, and more.
Bottom Line
So, is it a good idea to buy a car on a credit card in the UK? Ultimately, it depends on your personal circumstances. But, if you have excellent credit and can afford to pay off your debt on time, using a credit card could be a great way to get extra benefits with your car purchase.
Frequently Asked Questions And Their Answers
Can you buy a car with a credit card?
Yes, but you should weigh the pros and cons (outlined above) before using your card to finance a vehicle and pay attention to the interest rates, late payment fees, additional costs, etc.
How much can you put on a credit card when buying a car?
Your credit limit depends on the conditions to which you agreed when getting the card. While some cards have lower £5,000 limits, others may allow you to make purchases up to £30,000.
Why do dealerships not accept credit cards?
While the common answer to the question: ‘Do car dealers accept credit cards in the UK?’ is ‘yes’, you might wonder why some of them do not include this option. The most common reasons are avoiding the merchant fee that businesses have to pay for each card transaction and the lack of proper equipment to process such transactions.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.