Buying a car can be expensive. When you're in the market for a new or used vehicle, it's smart to shop around to ensure you're getting the right car at the best price. Part of this is considering whether to use car financing.
If you’re feeling adventurous, you may be tempted to purchase the car through a credit card. But can you buy a new car with a credit card? Will you have to pay interest? They’re both good questions – here’s what you should know.
Can I buy a car with a credit card?
Since the Consumer Credit Act of 1974, there have been a lot of changes to the options consumers have when using a credit card. So, the simple answer is yes – you can purchase a card with a credit card. But before you do, you should find out if the dealership even offers that option.
A good early question is whether or not they accept credit cards. Most of the time, they won’t let you charge the entire purchase price of your car. Some dealers will have a limit on the value of an individual purchase, so check before you sign up.
The process of buying a car on a credit card is the same as buying anything else on a credit card. The full amount is charged to the card, and then you pay the credit card company back over time while paying interest on the outstanding amount.
Unlike some other loans, you won’t have to pay a set amount each month. This gives you more freedom to choose how much you pay back each month, as long as you meet the minimum monthly direct debit payments.
Are there downsides to buying a car on credit?
As mentioned previously, certain car dealerships may not accept credit cards as complete payment for a car purchase. If a dealership does accept credit card payments, be aware that there may be a surcharge, which is often an unexpected expense.
If you don’t qualify for a 0% rate with a credit card provider, keep in mind that the typical APR rate is 10-15%, which is higher than a typical bank loan. Since most 0% deals also only last a couple of years, it would be best to either pay off the card before the 0% offer ends or transfer the balance to another card. In this case, it can be difficult and time-consuming to keep on top of it to avoid unnecessary fees or unwanted credit card debt.
Top Tip: If APR is new to you, read our guide on car loan APR.
When should you consider buying a car with a credit card?
If you’re thinking about buying a new or used car with a 0% interest rate offer, then it can make sense to charge it to your credit card. Before you go this route, however, make sure you can afford to pay off your car quickly. If you don’t, you may end up paying standard APR rates – which are higher than the rates you’d receive from a good car financing company.
Secure, reliable car financing
While you can buy a car with a credit card, doing so isn’t always the right decision. With My Car Credit, securing reliable and affordable car financing has never been easier.
We’re a fully FCA-compliant credit card company, so our customers know exactly what they’re getting from us. We work with a range of motorists to find the right finance plan that suits their needs, from people with poor credit to those who are self-employed.
To get started on your tailored car financing, use our free car finance calculator and then apply to get a decision on car finance without impacting your credit profile. We look forward to working with you to help you pay for your next car.
Representative APR 10.9%
Evolution Funding Ltd T/A My Car Credit
Require more help?
Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!