I am about to buy a new car (approx 20k) and I may buy it privately, or from a dealer. Can anyone tell me the most appropriate and safest way to pay for it?
I am wondering whether I can call the credit card company and ask for an increase in balance for a limited period - not for the credit but for the ease of payment. I'll pay it back through cheques etc.
Or, someone has mentioned a banker's draft. I haven't used one of these. Do they take long to get (I'm thinking of purchasing this fri/sat)?
Car companies (most of them) won't take credit cards IME, whether your balance is good enough or not. The 3% (or whatever) of 20k represents a big hit. Plus CC companies don't want to be in the warranty/complaints loop.
Pay by cheque. Or used tenners. Neither are a problem with dealers, although Joe Blow on the street may have a problem with either (but then I wouldn't buy a 20k car that way .. you are real short of comeback when it turns out Joe actually lives 400 miles away from where you met him, and the car wasn't actually his to sell).
God, getting decent service out of main dealers is hard enough already. I mean a £200 car, or even a £2000 car, fine, but a £20k car? From someone you never met before??
Pay a deposit by CC (at least a hundred pounds, preferably more), and get a receipt for it. The receipt should show the total sale price, the amount of deposit paid, and the amount remaining to pay.
Nope, they're trivially easy. Wander into your branch, ask for a draft for the amount in question -- and carry *loads* of ID: passport, driving licence, cheque book *and* a utility and/or bank bill or three. Once they've confirmed your ID, and checked you've the balance to cover it, they'll raise a draft pretty-much on the spot. Make very, very sure you know the exact name of the payee! You don't want to know how much difficulty you'll get into if you've got that, or the amount, wrong. You'll be charged for the service. Hint: don't do this at lunch-time!
Given the amount, it might not hurt to call your branch ahead of time to forewarn them of your intentions; they may be able to raise some of the paperwork beforehand.
Alternatively, and to avoid carrying large financial instruments with you, consider paying by CHAPS (same-day telegraphic) transfer instead. You'll need the recipient's sort code, account number, bank name and branch location. You'll also want to know what the recipient wants put in the reference information, so that they can determine it's your transfer, not someone else's. You can arrange a CHAPS by telephone to your bank. They may well want to do a security callback to confirm your ID before initiating it. Be warned that you should try to make the call to arrange the CHAPS before about 2pm; preferably before mid-day. Best to phone them ASAP and find out their procedures for CHAPS, as banks do differ. The charge for a CHAPS transfer is typically around 25 pounds.
If you've several days in hand, you might want to do it by BACS instead. Superficially similar to CHAPS, it takes the same amount of time as a cleared cheque, but doesn't cost you anything.
I ought to have said: the point of the deposit by CC is to bring the transaction under the Consumer Credit Act, and allow you to enforce your Sale of Goods Act / Sale and Supply of Goods Act rights through your CC provider if things go pear-shaped.
Wiser heads can comment on whether this neat trick still works, or whether the CC provider's liability's now limited to the amount on the card transaction.
Buy a copy of Whatcar magazine and read their comprehensive articles on buying new or used cars. OK, it is going to cost you 4 but... They make an interesting comment that is relevant to you.... i.e. that people don't usually pay that much for non-dealership cars.
I'd recommend the banker's draft method, which worked well for me. I phoned the bank to arrange it, and they told me what ID I'd have to produce on collection at my local branch (Lloyds TSB); they charged me
(I can't tell you what minimum notice period they need, as I arranged it several days in advance of collection.)
The car dealer took a cursory look at the banker's draft and was quite happy to let me drive the 25K car away.
Hmmmm. Reminds me of when I bought a car recently (from a main dealer of the "largest car company in the world"). The T&C on the back of the order clearly stated that balance could be paid by cheque - so I wrote a cheque. When I handed it to the salesman, he took it off into the corner, mumbled with his colleagues for a bit, then came back and said "don't you have a debit card?" !!
Obviously, paying by cheque *was* some kind of "problem" (even if only minor) for that dealer - so I didn't bother pushing it, and simply paid by debit card instead.
I have in the past used a debit card to pay for a car. It was a bit weird, but it worked. However, be careful to get the details exactly right. There has been a story in one of the weekend broadsheets (The Times, IIRC) recently where a lady wanted to buy a car from a dealer with a debit card, there was a problem, and the money was stuck in limbo with the bank, with neither the dealer getting the money, nor the lady getting her money back. The reason (IIRC) given by the bank was that since the amount was over a certain limit on a debit card payment, they had to hold the money in some sort of escrow.
Good answer, the only comment about the two methods I've not snipped is that you have no control when you get to the garage. If the car is not ready, or is the wrong colour, or it hasnt got the right sound system upgrade you asked for, then you can keep a bank draft in your pocket, but with these automated payments you've nothing to bargain with because the garage has already got your money.
Good point, well made. I guess I was expecting this to be a purchase from a used-car dealer, where you point to a car, and say, "That one, please. With a nice ribbon around it."
Since you can't buy *new* cars privately, it seemed a logical assumption, but I do see your point.
Wow! Thank you for the fantastic response. I shall be investing £4 tomorrow and having a good read. I don't fancy carrying hods full of cash around either so it will be the bankers draft for me.
Thank you, I take your points as well. One thought remains. What happens when you get to the garage which has by now already got your dosh, and the car has been sold to somebody else, or the garage is closed or gone bust?
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