Can I Buy a Car with a Debit Card?

Person buying a car using their debit card

If you’ve found your dream car, have enough savings in the bank, and haven’t yet considered looking at your different car finance options, you may want to seal the deal immediately by paying with a debit card.

However, whilst this may sound like the easiest method of buying a car, it might actually come with some complications.

Can you buy a car with a debit card?

Technically, yes, you can buy a car with a debit card. Buying a car with a debit card may be advantageous for you, provided you have enough cash in your account when you make the payment. Be sure that your bank doesn’t have a cap on the card’s daily spending limit, too.

That said, it’s not quite that simple. Some dealers simply won’t accept payment via debit card. There are a number of reasons why this could be the case. Firstly, there are fees that come with this process which can result in dealers losing net profit on a sale.

Secondly, debit card payments are riskier for them. If you, the buyer, dispute the sale for whatever reason, this can cost the dealer money – particularly if you only dispute the sale once you’ve driven the vehicle, which means that it can’t then be re-sold at its initial price.

Debit card vs finance

If you do intend to pay for your vehicle with a debit card, be sure to check that the dealer accepts this payment method prior to entering any negotiation. However, most drivers will benefit from car finance as an alternative to spread the cost of a new car. Get a car finance quote today for a better idea of your budget.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

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What to Do If You Can’t Pay Car Finance Because of COVID-19

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£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
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3 Benefits of Car Finance Even If You Can Buy Outright

Camping in new car bought on finance

A mistake that motorists often make is to assume that they don’t need car finance because they have the cash in their bank accounts. If you’re in the market for a new motor, you might not know whether it’s better to buy a car outright or with finance since there are pros and cons of each.

While buying outright seems the obvious choice, it’s well worth considering the latter option since finance deals provide many more features that you might not have factored into your decision. After all, it’s easy to focus on one dimension. Read on as we look at three benefits of car finance even if you can buy outright.

Spreading the cost

Paying a lump sum amount upfront isn’t always a savvy choice, especially if you don’t have the liquidity to react to emergencies. Picture the scene. You’ve just purchased a car with your savings and own it outright. But the week after, your boiler breaks down and you need to splash the cash again to fix it.

The average person can’t afford to keep on throwing substantial amounts of money around, particularly if it’s the end of the month. Thankfully, using car finance means you can spread the cost of the car over an extended period, letting you pay off the full amount monthly. As a result, you can keep the extra cash in your emergency fund for an inevitable rainy day. Our car loan calculator even helps you to crunch the numbers beforehand so that you know exactly how much you’re paying per month.

Flexibility

Of course, not every car deal goes to plan. When you own a vehicle, there’s nothing you can do about it if you fall out of love or the motor isn’t what you wanted. In short, you’re stuck with an expensive asset. Car financing is different as there are several options at your disposal.

For example, Personal Contract Purchase deals (PCP) are designed to give you the option to sell your vehicle back to the dealer at the end of the contract. With a balloon payment, you can either decide to pay it off in full or hand it back. If you do the latter, you can upgrade to a newer model, making PCP an excellent way to drive a different vehicle every couple of years. Alternatively, Hire Purchase (HP) lets you decide how long you want to pay back the loan. It could be three years or five, depending on the premiums and your disposable income.

More freedom

There’s a wide array of cars to choose from, and you don’t want your budget to get in the way. When you rely on your savings, this is bound to happen because you will find makes and models that are out of your price range. It doesn’t matter whether it’s £100 or £1,000 as you can’t magically generate the funds out of thin air.

With car financing options, your budget is greater because you can spread the payments out more, which means you can generally afford more. Therefore, you’ll be less likely to be bound to your budget if you come across a dream vehicle that is more expensive than you anticipated.

Car finance vs buying outright

If you’re stuck between buying a car outright or financing, the experts are My Car Credit can help you get a clearer idea of the finance options at your disposal. Working with a large network of leading lenders, we can find you a great finance deal that’s tailored to your circumstances and requirements. Don’t hesitate to call our team to find out more.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

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Related articles

Leasing vs Finance: What’s the Difference and Which is Better?

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How Do Balloon Payments Work?

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Will I Get Accepted for Car Finance?

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My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
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  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
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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!

Email
or call 01246 458 810

What to Do If You Can’t Pay Car Finance Because of COVID-19

calculator being used to work out how to pay car finance

The coronavirus pandemic has caused disruption in everyone’s lives across the UK. From the way we work to weekly supermarket shopping, COVID-19 has impacted all of us. While it continues to cause all sorts of stress around health, financial wellbeing is an escalating issue for many. If you’re worried that you can’t pay car finance or make your monthly repayments because of COVID-19, read on to find out what your options are.

Over two million car finance agreement were transacted in 2019 alone, meaning a lot of people will be worried about how they will make their payments in the months to come.

If you’ve bought a car on finance and can no longer afford it because you’ve been laid off, furloughed, or have seen a significant drop in your income, here is what you should know about your options to secure more affordable car payments.

Review your paperwork

Look over the paperwork that you signed when taking out your car finance plan. Read through the wording and check if there are any notes about relief and special circumstances. Understanding your contract will help when you contact the lender. Double-check the documentation on consumer rights. For more information about your contract, take a look at our Adequate Explanation videos.

Contact your lender

Once you have reviewed your paperwork, the next step is to contact your financial provider directly. We can also provide you with the contact details for most of My Car Credit’s panel of lenders.

The Financial Conduct Authority (FCA) requires all lenders to work with their customers to come to a fair and appropriate financial arrangement. If an individual or household income has been affected directly by COVID-19, lenders are offering payment holidays of up to three months which should allow you to keep the car moving forward.

Handing your car back

During the COVID-19 pandemic, lenders should, wherever possible, consider offering a solution that will enable you to keep your vehicle (if that is your wish), ensuring you can afford any monthly payments and allowing you to retain contractual rights such as voluntary termination.

If your car is financed by a Personal Contract Purchase (PCP) or Hire Purchase, you are allowed to hand it back to the finance company if you have already paid off 50% or more of the total amount payable, including any interest and fees. Note that if you cancel the contract, you will not get any extra money back. If you have yet to pay off 50% of the total amount payable, you will have to make up the difference.

As per your agreement with the lender, charges may apply for damage to the car over and above reasonable wear and tear. You may also incur a fee for ending the agreement early.

In many cases, you will be able to keep your vehicle. Even if you’re coming to the end of your PCP agreement, you can refinance the balloon payment instead of paying a large lump sum of cash to keep the vehicle. This is something that My Car Credit can help you with so get in touch if you think balloon refinancing is the right option for you.

Expert financial advice and support

My Car Credit can help you throughout this troubling time. We make the car finance process simple and hassle-free. Our agents are experts in the industry and stay updated on the latest offerings and relief available throughout the pandemic. For more information, call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk. We look forward to hearing from you.

If you are concerned about the financial impacts of COVID-19 or are experiencing financial difficulties, the following not-for-profit organisations also provide free, confidential and impartial debt advice and support:

Citizens Advice – www.adviceguide.org.uk

National Debtline – www.nationaldebtline.co.uk

Money Advice Service – www.moneyadviceservice.org.uk

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

Return to Car Finance Options
Return to search

Related articles

5 Different Ways to Pay for a Car

Read More

8 Advantages and Disadvantages of a Balloon Payment

Read More

Car Finance vs Personal Loan, what’s best for me?

Read More
My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
Reviews icon
TrustPilot icon
Trustpilot

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!

Email
or call 01246 458 810