Dealer insisting on bank transfer - normal?

[Mike2222]

PHEV finally arrived at dealer and all being lined up for collection tomorrow, only for dealer to spring on me that is "company policy" for any payments over £500 to be by bank transfer, which must be sent and checked at least 24hrs before handover. 

This strikes me as a scummy move on a variety of fronts, and was never mentioned during early conversations or at any point during the order process. I understand that it may be prohibitive for dealer to accept the balance of the sale on credit card specifically, due to transaction fees, but I'm not particularly comfortable with giving up any degree of consumer protection from credit (section 75/75a) or debit (chargeback) cards, or just the inherent paranoia of sending a vast sum of money to the wrond account! I intend to insist on paying £500 on credit card (but don't know exactly what protection I would have with that, as total cost of car is >£30k, but total cost of deposit is obv <£30k), but feel my hands are tied as I don't want to back out of the sale over this. 

I have only purchased one car from new before, and that deposit was allowed on credit card (I preloaded the card to along the full deposit), so I don't know if this is normal, or perhaps becoming more the norm in recent years since introduction of new laws stopping retailers from passing transaction fees onto customers? Have others had to do this with their new Rav purchases? Would appreciate some thoughts/advice? 

NB - I am purchasing on PCP, but this was only because was 0% at no cost to me (which is no longer available), and I intend to own the car long term. I think this means that I have some protection from the credit agreement (ie the credit provider is equally liable for the lending/car, even if the dealer went bust/decided to ignore me about any complaints etc) for the whole transaction value?? 

[PAISLEY1903]

Only deposit I had to pay was for my camera and pro protect and it was all on my credit card.

If think all is good with garage and doing pcp like I would just go with it but you could tweet Toyota online as there really good at giving opinion

[FROSTYBALLS]

Under a PCP, like hire purchase, you don't own the car until the final (balloon payment for PCP) payment is made. Until then the car is owned by the finance company. 

You may be the registered keeper (ie be named on the V5C), but that isn't proof of ownership.

As far as I'm aware PCPs may be covered under section 75A of the Consumer Credit Act 1974, and regulated by the FCA.

Could consider using the Faster Payments Service which is quicker and uses the Confirmation of Payee, which is an account name checking service to make sure your payment goes to the right place. 

 

[dannyboy413]

As long as you are buying an item worth £100+ and pay the deposit by credit card, even just 1 penny, Section 75 covers you. I have just had a quick read of the following link and I think PCP is covered.

https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

[Bernard Foy]

Different companies have different financial policies and regulations due to the strict rules concerning possible money laundering. But you have good point in this should have been discussed with you during your financial discussions 

[bunnyrabbit03]

My dealer has the same policy (I paid £500 by credit card, the remainder of the deposit by bank transfer shortly before handover). As dannyboy413 wrote, as long as you paid some of the amount due by credit card, you are covered under section 75. 

[Hayzee]

I believe you'll find you have good protection by virtue of the PCP agreement with Toyota finance.

"The Consumer Rights Act covers both your short-term right to reject the vehicle (which lasts for 30 days after you purchase a new or used car from a dealer) and your final right to reject (which extends for the first six months of ownership)"

I payed a significant deposit via my bank visa debit card which is just as good as paying by BACS as the dealer receives immediate confirmation of funds.

I wouldn't be concerned that your not using a credit card.

[forkingabout]

I paid a £1k deposit via my debit card when I ordered my C-HR.

Chip & pin with a card terminal receipt plus a printed deposit invoice receipt for my vehicle order. 

Proof of ID was my photocard driving licence. 

 

[Flatcoat]

Money laundering prevention and fraud prevention require such procedures these days. I think you are getting in a lather about nothing. Pay up, get your car. 

[Spo2]

50 minutes ago, bunnyrabbit03 said:

My dealer has the same policy (I paid £500 by credit card, the remainder of the deposit by bank transfer shortly before handover). As dannyboy413 wrote, as long as you paid some of the amount due by credit card, you are covered under section 75. 

Did exactly this. 

[Cyker]

Bank Transfer is a bit weird if it's paying for the whole car, and it's a real faff so if it wasn't discussed beforehand that's just lame. Usually dealers won't do credit cards for the lump sum as the fees are astronomical, but I've never heard of anyone not accepting a debit card, which has far lower fees.

If it's being bought on finance, that's different as bank details are required for the direct debit to be set up, so that's normal.

's funny thinking about it as I've used all possible payments to buy a car! First car was bought with cash (Carrying that amount of money was terrifying and something I never want to do again! ), second was with a cheque (Remember those??), third and forth were debit card, and last was direct debit!

[Hornet3D]

Sadly the rules on credit cards, and to a lesser degree, debit cards is changing all the time but when you see the amount lost by the banks to fraud each year I guess you can understand why.   Quite rightly there is a suspicion if someone arrives to pay for a high values item with cases full of cash, well unless if it is an apartment in a globally well known tower.  There is also the risk taken by the dealership for having large amounts of cash on the premises so bank transfer seems the most logical option but that should clearly have been made clear to you long before you reached this point.  

Restrictions on credit cards for buying on line is also changing, on Monday I believe, where by single use codes will be sent to your mobile phone for each transaction.  While I understand this extra security each such move makes life more difficult for those that are not connected to the Internet or do not have a mobile.  For instance I have an elderly neighbour who has no computer and no broadband and a land line for a telephone, or at least she did until recently when the land line service was withdrawn.  So modern day life has forced her to become connected, in her case it is not a major issue because she was not connected by choice not by the inability to grasp the concept.

Even after paying by credit card the rule changes do not stop with introduction of changes like persistent debt rules whereby you monthly repayments are increased if you are not paying off a credit card debt at a certain rate you give you less control.  Again I can understand the reason for this but when it was first introduced we were not looking at the cost of living rises we are now and many use credit cards just to feed the family and do not have the ability to pay more than they have in the past.

I understand your concern but it would be a shame to let this mar the occasion as buying a new car is a fairly rare event and should be a thrill.  Perhaps using the Faster Payment Service as suggested by Frostyballs the may be the way to go.  

 

 

[ernieb]

I paid for mine with a debit card on the day and I think I've my last 4 cars this way, simple.

[Catlover]

I paid for my Prius, the balance after part ex, by debit card. The only thing I did beforehand was phone my bank and told them the approx time I would be using the card and the amount.  On a previous transaction of a large sum of money for security reasons they withheld payment…….. problem was they forgot to tell me!  I forgave them for causing me trouble that day, but made sure they new on the occasion I picked up the Prius.

[ernieb]

I’ve also phoned the bank in the past and they just said that there was nothing they could do, the system was automatic and if they needed to confirm they would phone the dealer and ask security questions.

I guess now that they would use the two part security and either text or email a security number.

[Hornet3D]

As with all security measures they tend to inconvenience the honest people more than the criminals but that is life I guess. 

[1928KH]

I checked with the dealership that they would accept payment by debit card. I rang my bank and informed them that I would like to pay by debit card, gave them the approximate amount and expected payment date of 1st March 2022.

They told me that on payment they would call with a code which the dealer should input to confirm the transaction. I then pre-loaded my account with the amount required.

In the event I proffered my debit card and the transaction went straight through without the need for any confirmation code etc.

I can only assume that my account had been flagged to allow the transaction to go through unchallenged.

Debit card payment seems to be the best compromise, the dealer gets their money, we get our car and we haven't paid up-front with the risk of the dealer going bust and taking our money with them!

GDB

[Catlover]

54 minutes ago, ernieb said:

I’ve also phoned the bank in the past and they just said that there was nothing they could do, the system was automatic and if they needed to confirm they would phone the dealer and ask security questions.

I guess now that they would use the two part security and either text or email a security number.

My bank can do something. When we were going to USA I read some info on my bank webpage that was saying it would be best to let them know going abroad to avoid potential problems. I did inform them and there was no problem, and the house was broken into while away. 😄

[ernieb]

Sorry to hear that Joe, hope they did not get away with personal items and no damage. Stuff can be replaced but the items that have made your life often can not.

[ColinB]

I paid a £500 deposit using my credit card, however the dealers required the balance to be paid using a debit card due to the fees involved. There were no identity checks as this was the 8th vehicle that our family had bought from the dealer, in fact the same salesman. He always smiles when we walk in......

[Hornet3D]

2 hours ago, Catlover said:

My bank can do something. When we were going to USA I read some info on my bank webpage that was saying it would be best to let them know going abroad to avoid potential problems. I did inform them and there was no problem, and the house was broken into while away. 😄

I have heard of such coincidences in the past, happily my international travelling days are over so it is not an issue.

[Catlover]

Sorry, in my above post I should have said whilst we were away our house was NOT broken into. My mistake.

[philip42h]

Remember Bankers Drafts? Buying a car seemed to always involve a Bankers Draft ...

I had been expecting to use a debit card when buying my current car but all payments were made by credit card:

• The deposit payable on order - was clearly with the deals 'weeks' before the car was delivered
• The finance paperwork was signed a week before the car was delivered - the car was in the yard round the back by that time
• The balance was paid by credit card when I collected the car

But, the dealer was never 'exposed' - they had the (small) deposit, they had a signed finance agreement, the car was bought on PCP with the vast bulk of the 'cash' element coming from my PX (which they valued and took possession of before they handed over my new car), and the majority if not all of the balance was for dealer fit accessories that I'd have expected to pay for by credit card anyway. (And I wasn't exposed because I "knew where they lived").

I imagine that it would have been rather different had I sold my previous car privately so that there was a significant deposit to pay. In that case I would rather expect the dealer to want to see the money in their bank account before they handed over the car ...

[flash22]

That is BS i have paid for cars in cash over 3 payments from a main dealer no issue iirc the limit is £5k per transaction not within 24 hours of each other

Payments via CC may attract a 2% fee for the dealer

companies may have their own internal policies tho

[Spo2]

12 hours ago, Cyker said:

Bank Transfer is a bit weird if it's paying for the whole car, and it's a real faff so if it wasn't discussed beforehand that's just lame. Usually dealers won't do credit cards for the lump sum as the fees are astronomical, but I've never heard of anyone not accepting a debit card, which has far lower fees.

If it's being bought on finance, that's different as bank details are required for the direct debit to be set up, so that's normal.

's funny thinking about it as I've used all possible payments to buy a car! First car was bought with cash (Carrying that amount of money was terrifying and something I never want to do again! ), second was with a cheque (Remember those??), third and forth were debit card, and last was direct debit!

Online dealers like Cazoo, Cinch etc accepts credit card, so one can also get good cashback (if applicable) in addition to section 75 protection.