Buying car insurance with a credit card

[twazzock]

Yo,

I'm in the process of buying my first car. I won't be able to afford the yearly premium in one go, and paying monthly puts the overall cost up to a prohibitive (and fking extortionate) level.

Would paying for the year's cover with a credit card, then paying that off monthly be a good idea? I could probably pay it off in 2-3 months if necessary.

What problems am I likely to face? I've a feeling that there'll be some question of my employment situation and credit record?

Any help appreciated, thanks.

[anonymous-user]

yes, that is one use of a credit card

do you have one with a suitable limit?

remember the insurance co might charge a few quid more to cover its costs of processing the card payment

[Pickled Piper]

I take it you don't have a card already. In which case you will have to go through the application process, credit checking etc.

You are looking for a short term loan. You can get this for free by applying for a credit card that gives you an interest free period. Read the terms and conditions carefully and providing you don't go mad and are disciplined with your finances then it's a good way to get a free short term loan loan. Alternatively, a bank overdraft may be your next cheapest option.

Have a look on money supermarket or MoneySaving Expert.com for the best credit card deals.

pp

[BoRED S2upid]

Yes and if you can find a car with 0% on purchases then your laughing.

[twazzock]

Thanks for the replies. I'll have a look on MSE for some ideas.

Do you think it likely any companies will allow me (18, stty retail job, no credit history) a ~£1500 limit? That's all I need it for really; soon as it's paid off I'd probably put it away for good or close the account.

[Mojooo]

If its your first credit card then you might be unlikely to get a 0% one straight away - plus with the credit market as it is now I imagine the number of 0% deals has dwindled.

Now that you can apply etc online, actually getting the card doesn;t take long.

Try somewhere like Virgin, they have 0% intereste for 3 months. i have had 2 0% cards off them in the past.

when i was 18 my first card was with barclaydcard - i got it after failing checks with other companies. the interest was 18% though.

Its a question of working out wether paying interest to a card company is cheaper than paying interest to the insurance company.

if your insurance is over "£1000 then the pay monthly option with insurance will prob cost more than a CC if you pay it off within 2 months.

remember with a credit card you need to make a payment everymonth and the more you pay the less interest charged.

[Nickyboy]

Why does paying monthly make it unaccessable? Mine adds about £25 to the policy and thats only the interest which is about 4%

[CWH]

Because as he said he's 18.
Some companies won't even take monthly payments at that age and some will ask for say, a £1000 more as 'you get a discount when paying your insurance off in one go.'
Try for a card but you've said your 18 and work in retail they might not give you a big limit to start with.
I tried for a Virgin card when my insurance was up for renewal but decided to use my overdraft to pay it off.
Just depends how much money you have at the time, how big your O/D is and how much your insurance is.