Is it possible to buy a car with a credit card?

Key takeaways

• It can be possible to buy a car on a credit card, but you will need a high enough credit limit and it will depend on the policies of both the card issuer and the dealership

• As well as a high credit limit, the best credit card for buying a car will ideally give you a low or 0% interest rate for a given period and rewards, such as loyalty points

• There might be better options than using a credit card, including a personal loan or car finance, such as Personal Contract Purchase (PCP) or Hire Purchase (HP)

Is it possible to buy a car with a credit card?

Yes, it can be possible to buy a car with a credit card, but there are a number of factors to take into consideration:

Your credit limit

Many cars will cost more than the amount you’re allowed to spend on your credit card – also known as your credit limit. It might be possible to part pay the purchase on your credit card and make up the shortfall from your bank account, for example.

Alternatively, you’ll need to make a special arrangement with your credit provider to raise the existing limit.

Your credit card issuer

Some issuers have rules against using credit for high-value transactions, such as car purchases. This is because unusually large purchases can trigger anti-fraud systems or breach internal spending limits, meaning the payment may be automatically declined or require additional verification.

The car dealership

The acceptance of credit cards at dealerships varies. Since 2018, businesses have generally been restricted from adding extra charges for payments made with consumer credit and debit cards, which means some dealerships may limit card payments or refuse them altogether.

Which type of credit card should I use to buy a car with?

Choosing the right type of credit card to buy a car depends mainly on how you plan to repay the balance.

For most people, the most suitable option is a 0% purchase credit card. These cards give you an interest-free period on new spending – often up to around 22 months – allowing you to spread the cost of the car without paying interest, provided you clear the balance within the promotional window.

If you’re not using a 0% deal, a low-interest purchase card is the next best option, as standard credit card rates can make a large purchase very expensive if you take time to repay it.

A rewards credit card (offering cashback, points or air miles) can add value on a large purchase, but only really makes sense if you can still clear the balance quickly or within a 0% period – otherwise interest will outweigh any rewards earned.

How to buy a car with a credit card

Purchasing a vehicle with a credit card involves a number of steps, from pre-approval through the final transaction. Here’s how it works:

Check with your credit card provider

Before attempting to buy a car with a credit card, confirm with your card issuer that the purchase will be allowed. This will help you understand your available credit limit, any spending restrictions on large transactions, and the interest rate or fees that could apply.

Selecting a dealership

Choose a car dealership that accepts credit card payments. Not all dealerships do, so it’s crucial to confirm beforehand.

Negotiating the purchase

Discuss the car price with the dealership. Remember, paying with a credit card might limit your bargaining power as dealerships often incur fees for credit transactions.

Completing the transaction

Once the price is agreed, you can complete the purchase. The transaction will be processed like any other credit card purchase.

Immediate financial implications

Be prepared for the immediate impact on your credit utilisation and potential interest charges if you don’t pay off the balance by the following month or when the 0% period ends.

Should I buy a car on a credit card?

Even if it’s approved by the dealership and your card issuer, and the cost of the vehicle is within your credit limit, it might not be smart to make a car purchase on your credit card.

The main consideration is whether you can pay it off on time. If you can’t clear the debt by your payment deadline, whether that’s the following month or at the end of a 0% period, high interest rates will likely kick in on an already large balance, turning your credit card purchase into a far more expensive purchase than if you had chosen a different means.

If you are confident you can clear the balance in full and on time, then a credit card might be worth considering. A potential advantage of using a credit card is added purchase protection and, depending on the card used, the possibility of earning rewards or spreading costs using a 0% purchase offer.

Does buying a car on a credit card give me extra protection?

Credit cards can offer valuable protection under Section 75 of the Consumer Credit Act. If a car costs between £100 and £30,000 and you pay at least part of the purchase price on your credit card, the card provider may be jointly liable if something goes wrong with the purchase.

What are the alternatives to using a credit card to buy a car?

There are several alternatives to using a credit card to buy a vehicle. These include:

Personal loan

Taking out a loan allows you to buy the car there and then and pay it off in a set number of monthly instalments. You’ll know the cost you face from the outset, and provided you have a good credit score, should be able to secure a deal with a lower interest rate than you’ll face with a regular credit card.

Car finance

There are different options such as Personal Contract Purchase (PCP), Hire Purchase (HP) and even leasing that are specifically designed to help get you behind the wheel in the car of your choosing. There are pros and cons to each.

Save up and buy outright

Typically the least expensive option, but the downside is that you have to wait to make the purchase. If a new car is a necessity because of a work commute, for example, then this might not seem a favourable choice.

Tim Heming
Personal Finance Expert

Our expert says...

“Buying a car on a credit card is a relatively unusual step and talking to dealers, they may try to dissuade purchasers from taking this option. However, if you do think it’s a route for you, then be completely sure you will be able to clear the balance promptly. Otherwise, you’ll face the double whammy of high interest rates on thousands of pounds of debt, which could plunge you into financial difficulty.”

Other useful guides

If you’re looking to buy a car, MoneySuperMarket has a number of guides that can help. These include:

• What car finance option is the best for me?

• Car finance versus bank loan. Which is better?

• What’s the difference between Hire Purchase and leasing a car?

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