Buying a car, credit card or loan? Am I missing something?

[2019sunshine]

Need a car for work. Found one for 4.5k. There’s cheaper ones but after buying old and cheap in the past, they don’t last!

Would you go with credit card on 0% interest 36 months or a loan? I’ve not looked into loans yet but obviously there would be interest more than 0%!

I can pay around 150 without much difficulty a month. A lot of people seem wary of credit cards for large amounts, am I missing something?

I suggest you ask for this to be moved to another board such as money matters...

If u can afford £150 per month u might be better leasing. If u don't mind not owning the car.

U wld get a small brand new car for that price per month. It includes the car tax but u wld need to maintain it, so new tyres if required and service but it will be covered under warranty for anything that goes wrong.

Yes,use the card.
Interest free and you get extra cover incase the car goes wrong.

Not all garages accept credit cards. I recently bought a car, some garages would, some wouldnt. The Honda garage would only take max of £1500. They said it was due to money laundering which is obviously shit as other garages would take the full amount. I could do bank transfer or take their finance out.

If you pay it on your credit card, can you still afford your insurance and road tax, plus MOT and servicing?

Don't leave yourself short.

They will accept credit card for it. I thought about leasing but this car has only done 25000 miles so it’s fairly new in terms of usage. I sort of think getting new one (as nice as that would be!) would leave me with nothing at the end?

ami I can do the insurance and tax separately so that’s ok. Would just use money rather than credit for that.

Leasing is good if you are happy never to own the car, and it's a great way of having a new car on a regular basis, but you need a good reliable income to cover the leasing costs. I'd go for interest free as long as possible then look to transfer the balance for as low a rate as possible. Loans usually are more expensive.

I’d love a nice car but it’s not a priority, feel a bit more confident owing it. You’ve got me thinking now though! Haha

I'd go for 0% credit card especially as you can easily pay it off in full before the 36 months is up

When I was working full time and had a good income leasing (around £150 a month) was brilliant as the car was handed back before it started costing money on services etc. When I was goi g part time I saved enough for the final payment and then owned the car outright.

That’s the thing I’m not sure with 150 a month I’d get a nice one leased!

I appreciate that this is not what you asked but I would be VERY wary about buying a car on credit, certainly if it is going to take 3 years to repay it.

Of those options I'd personally go for the personal loan if you can get a rate of about 3% purely due to it being a fixed payment. If you missed a payment on the CC then the rate will increase to 20% or whatever and you could end up stuck. It's easy to miss a payment for one reason or another. Miss a payment on the loan and you just make it up when you can usually with minimal penalty.

But, like I said I would not borrow for this. I know you've done cheap cars before but you can definitely get something half decent for £1,000, have it paid off in 8 months and then the £150 a month can go into savings for when it's time to buy again.

The biggest issue for borrowing to buy is if you have a car problem, what if the engine just goes and it's not economical to repair, you still have £150 a month to pay but no car. Believe me I've seen it happen and it's never good. Everyone thinks it won't happen to them but it happens to someone every day.

Thanks for your message! Definitely something to consider. The car is about 4 years old so no really old but not new either. It would be rubbish to be stuck with repayments if it was to break down.

I do have a tiny bit of savings (circa 3k) as back up but this is exactly why I did this thread because it’s a big decision! Maybe leasing is better overall?!

I would read up about this whole business of leasing a car far more carefully before committing. Money savingexpert.com's website has some good info on this whole subject.

If you lease you need to consider what you'll do if you were to lose your job or similar. At least if you have a loan or credit card you can sell it and pay off the debt.
With a lease you're committed to a set term.

I paid £900 for my old car and it has been fine for four years.

I'd use the 0% card. We've used one for a similar purchase and it's worked brilliantly. As long as you pay the minimum amount every month the interest will be 0 - set up a direct debit and it'll be fine.