Got my pcp agreement coming to an end and just deciding to pay off the final balance and keep the car this time.
What do people think are the best ways to do this? I have the cash available but thinking there must be a better way than just direct debit. e.g Get a 12 month interest free purchase card or pay on my amex to collect points.
My concern with the interest free card is getting a high enough limit (£10k) or the card seeing the payment as more of a balance transfer rather than a purchase as it is paying off finance.
Have you checked what payment methods the finance company accepts? I’d be very surprised if they let you pay off a credit balance with a credit card.
You’re probably looking at a money transfer, but at that point with the fees you may as well just pay it off without using credit.
Agreed on check what payment terms they offer.
You could look to finance the remaining sum, if you can be assured you can beat the interest rate charged to you with the interest rate savings will get.
If not, find the most beneficial/cash back/points method they support and use that.
Ultimately it’s going to be a debit card or bank transfer payment only & most (all?) cash back systems won’t allow for that type of payment (Amex probably won’t too)
their documentation says this so I presumed credit card is fine
Retaining the Vehicle
Should you choose to retain the vehicle you need only inform us
of your intention and allow the final payment (OFP) to be taken
via direct debit if possible.
If you wish to make payment using a different method, please
visit our website at www.santanderconsumer.co.uk to obtain the
relevant payment details or to pay by credit or debit card.
If you had a good money transfer offer it’d depend on whether the transfer fee would be offset by interest you’d earn by keeping your own money in the bank. But if you don’t already have a card with a sufficient balance that has offers, it might not be viable.
I have decent limits with Barclaycard and Lloyds who always have money transfers available for around 3% so if it were me it’s what I’d do (in fact it is what I did recently when buying a fairly cheap second hand car). Had a fee of 2.8% which was essentially inconsequential.
If it does let you pay by credit card, you could get any points/cashback and then do a balance transfer if you had a high enough limit and good rates, but again depends if the interest you’d earn on your own money would even be worth it.
Also the transaction to pay it off may not even be eligible for cashback, some have exclusions depending on the merchant code and paying off a credit product may not be included.
On balance, if you have the money, it may be simplest to just pay it off and have done with it.