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Credit Card - or not?


SamD
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I was speaking to a Car Dealer a few days ago and he was telling me that two major dealerships have now joined what they are terming the "Martin Lewis Effect" in banning the acceptance of credit cards in any transactions for their car sales.  A considerable number of independents had already done this following what they describe as ludicrous 'hand back' of cars after years of use with following decisions seeming to favour the punter rather than the dealer.  Of course this is one side of the story.  He hasn't accepted CC for over a year now and has not seen any downturn in trade.  Might be old news but I had not heard it before.

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34 minutes ago, SamD said:

I was speaking to a Car Dealer a few days ago and he was telling me that two major dealerships have now joined what they are terming the "Martin Lewis Effect" in banning the acceptance of credit cards in any transactions for their car sales.  A considerable number of independents had already done this following what they describe as ludicrous 'hand back' of cars after years of use with following decisions seeming to favour the punter rather than the dealer.  Of course this is one side of the story.  He hasn't accepted CC for over a year now and has not seen any downturn in trade.  Might be old news but I had not heard it before.

You think that’s strange. Try paying 23 k in cask when the advert says cash price.

 

some cash the rest debit card  I think it had to be less then 10 k.  In cash.

 

told me it was  deemed as money laundering.

so why advertise cash price.

 

then their office were asking if I could prove where the cash came  from

 

i would not tell them so they settled for a copy of my driving licence.

 

This was two weeks ago


would this also apply for a new caravan ?.

Edited by Sonar
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I purchased an Astra, a long time ago with a CC. The card was a General Motors CC, the deposit was the trade in car & the balance was on the card. It worked at the time?

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I bought my car and caravan this year and both instances was told I couldn't pay with a credit card. 

I paid the holding deposit on a credit card and the balance on debit card on delivery. 

This should hopefully give me the same insurance if something goes wrong. 

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I bought our caravan last year from a local dealer and paid the deposit with a credit card in order to give me some protection. There was certainly no talk of not accepting credit card payments.

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Just paid for a new ( to us) caravan by BACS. The deposit was paid with a debit card. No problems encountered.

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15 minutes ago, Graham over 70 said:

Just paid for a new ( to us) caravan by BACS. The deposit was paid with a debit card. No problems encountered.

I think the point is that if you pay even a small amount by Credit Card then you get additional consumer protection and the liability is carried jointly by the vendor and the CC company.

 

Vendor would be more than happy with DD and BACS - less come back if anything goes wrong.

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6 minutes ago, LittleGreyCat said:

I think the point is that if you pay even a small amount by Credit Card then you get additional consumer protection and the liability is carried jointly by the vendor and the CC company.

 

Vendor would be more than happy with DD and BACS - less come back if anything goes wrong.

Debit card payment is covered under 'chargeback'. Not quite as powerful as section 75, but still can be effective.

 

https://www.money.co.uk/current-accounts/is-debit-card-protection-the-same-as-for-credit-cards.htm

 

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The point is a credit card company isn’t going to be fobbed off with the I will have to check if it’s covered by the warranty excuse.  

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Whilst dealers can trot out reasons like the risk of chargeback etc I don't think that washes. As GO70 points out debit cards are covered under the card scheme chargeback rules but don't have quite the same force as the Section 75 law of the Consumer Credit Act that applies to credit cards, but there's still a risk of chargeback.

 

No, it's purely that a credit card transaction is charged by the processing company as a % of the transaction value. So, even if the charge is as low as 1% on a £25,000 sale that's £250 of margin gone walkabout. Conversely a debit card is charged on a pence per item basis, so even if paying £1 per transaction there's a £249 difference in profit for the dealer.

 

Back when I worked in the payment card industry the charging of customers for using a card was banned both by government and the merchant agreements with processors. Then the government relaxed that rule, under pressure from various sectors like the low cost airlines and travel agents etc. That led to airlines especially charging customers for card use at well over the price the business was being charged by their processor, so it was banned again. Car dealers have fought shy of credit card acceptance for many years because of this problem.

 

As an ex-industry insider, we hated low value credit card transactions as they earned very little but all transactions cost the same to process. So high value transactions with high value earnings were much more profitable. On the other hand, with debit card transactions it didn't matter if they were high or low value as you earned the same amount come what may. 

I've got nothing to do on this hot afternoon

but to settle down and write you a line.

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On 14/08/2021 at 19:04, LittleGreyCat said:

I think the point is that if you pay even a small amount by Credit Card then you get additional consumer protection and the liability is carried jointly by the vendor and the CC company.

 

Vendor would be more than happy with DD and BACS - less come back if anything goes wrong.

 

That additional protection would be when £100<amount paid<£30000

 

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The protection is there for anything brought on credit (not just credit card) with a total price of £100 or more, up to £30,000. You don't have to have paid the full amount by credit card, just a part payment gives you cover for the total value of the product.  

 

If you pay just £150 by credit card and £29,849 by cheque, then the credit card issuer is liable for the whole £29,999. So the card processor might charge the merchant £1.50 for handling the transaction but assumes liability for £29,999 if the merchant messes up or goes belly up. Then merchants complain about the charges.

I've got nothing to do on this hot afternoon

but to settle down and write you a line.

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  • 3 weeks later...

If the dealer will not accept a credit card then I would be suspicious and go elsewhere. I find the explanation given as very dubious and think it may just cover problems with their cars.

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I used section 75 to successfully get a refund on a nearly new Vauxhall Astra. I'd paid a grand on the credit card. 

 

No section 75 protection, no deal from me

 

Rudd 

Online blog and travels, although sometimes there is a lack of travel due to work!

 

It's an uncharted sea, it's an unopened door but you've got to reach out and you've got to explore.

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On 14/08/2021 at 12:19, Sonar said:

You think that’s strange. Try paying 23 k in cask when the advert says cash price.

 

some cash the rest debit card  I think it had to be less then 10 k.  In cash.

 

told me it was  deemed as money laundering.

so why advertise cash price.

 

then their office were asking if I could prove where the cash came  from

 

i would not tell them so they settled for a copy of my driving licence.

 

This was two weeks ago


would this also apply for a new caravan ?.

 

In the context  of buying goods, the term "cash" is any method of payment that doesn't involve using dealer sourced/arranged finance.

 

However paying by credit card is usually restricted to deposits due to the processing costs the dealer incurs, debit card fees are much lower as has already been explained.

                                                    ********************************************************

 

Regarding paying actual pound notes money laundering legislation is very clear.

 

Quote

 

https://www.gov.uk/guidance/money-laundering-regulations-high-value-dealer-registration

 

A high value dealer under Money Laundering Regulations is any business or sole trader that accepts or makes high value cash payments of 10,000 euros or more (or equivalent in any currency) in exchange for goods. Cash means notes, coins, or travellers cheques. This includes when a customer deposits cash directly into your bank account, or when they pay cash to a third party for your benefit.

HMRC considers a high value payment to be:

a single cash payment of 10,000 euros or more for goods

several cash payments for a single transaction totalling 10,000 euros or more, including a series of payments and payments on account

cash payments totalling 10,000 euros or more which appear to have been broken down into smaller amounts so that they come below the high value payment limit

You need to register if you accept or make high value payments for the following:

single high value cash payments for a large quantity of low value goods

high value wholesale or retail transactions

a single high value transaction made in instalments or on account

 

 

Jaguar E-Pace 180D HSE R Dynamic - 2008 Swift Conqueror 540

 

"Unless otherwise stated, my posts will be my personal thoughts and have the same standing as any other member of Caravan Talk"

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