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!
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.
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.
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:
|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.
Buying a car on a credit card is the recommended payment method in a variety of situations:
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.
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:
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.
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.
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.
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.
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.