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PCP car finance

7 replies

Moomuffin · 30/09/2023 20:47

My PCP agreement is up in December and we’ve decided to keep the car and pay the balloon payment.
We planned on paying the balloon payment by interest free credit card but paying the agreement by card isn’t an option.
Theyre saying bank transfer, check or DD.

Does anyone know why this would be and whether there’s anything I can do about it?

Many Thanks

OP posts:
DeltaAlphaDelta79 · 30/09/2023 20:48

Interested as I will be in this position soon and assumed I would put it on a credit card too.

Teeheehee1579 · 30/09/2023 20:48

They can choose to take any payment method that the like. Taking credit cards costs the business between 2 and 3% of the transaction so I imagine that is why they won’t accept a credit card payment

BarbaraofSeville · 01/10/2023 05:38

Yes, it's due to the charges.

But there are ways around this. You could look for a money transfer credit card but they tend to attract a fee.

How much is the balloon payment? One option would be to apply for a 0% purchase card if you don't have one already, Moneysaving Expert shows several available, with long 0% periods.

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/#what

So if you use that card for other normal spending (eg groceries, fuel, meals out, Christmas shopping, holidays, etc etc, any non DD spending really) to the amount equivalent to the balloon payment, then just use the money not spent on these things to pay the balloon payment and you've done what you wanted to do, without any fees or interest.

If you start now, you have at least a couple of months head start so might be able to do it, depending on the size of the payment, especially if this is an interest minimisation exercise rather than needing to borrow the money to make the payment. If you haven't spent enough by the time the payment is due, just pay it from savings if you have them, then carry on with with your 0% spending until you've built up a balance to the right amount.

Then you can just pay the minimum on this card to spread the cost of the balloon payment over the rest of the 0% period.

If you do need to borrow to make the payment, The money transfer route might be the cheapest way to do it (I'm not up to date on personal loan rates now that interest rates have gone up, they used to be comparatively cheap, under 3% but I doubt that's the case now).

BarbaraofSeville · 01/10/2023 05:39

You could also always ask them if they'd accept a credit card if you paid the fee it cost them.

Moomuffin · 01/10/2023 06:52

Yes I was thinking of asking if I can pay the fee.

I just wanted to avoid paying any interest. My plan was to pay part of the balance out of savings and the rest interest free.

I’ll speak to them on Monday and see what they say.

OP posts:
Hitchens · 02/10/2023 06:50

Just remember that their motivations are going to be different to yours. They aren't going to be minded to help you pay the balloon payment, they are going to be motivated for you to swap their car and take on a new PCP finance deal. So keep that in mind.

Lightsandtights · 02/10/2023 07:07

My credit card allows a cash payments into my bank account. Might be worth checking if yours is the same.

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