Buying a Car in the UK – Best Way to Pay

There can be some big savings to be made by buying a used car from Northern Ireland or Britain and bringing it to Ireland.

In the first 6 months of  2019, almost 40% of all car registrations were on imported cars.  The number of imported private cars licensed increased by 2.8% compared with the same period in 2018. There were 51,694 imported cars licenced compared to 77,639 new cars in the first 6 months of 2019.

Buying a car in Northern Ireland, England, Wales or Scotland will usually end up costing a lot less for Irish residents – especially when the Sterling/ Euro exchange rate favours the Euro. Since the vote for Brexit – the value of the Pound has fallen quite a lot   – making used UK car purchases even better value.

See more about the  latest Euro Sterling Exchange Rate Here

Buying a used car from the UK and importing it into Ireland can sometimes save buyers several thousand Euros – even after you factor in the expenses of travel, VRT etc.

The used car prices in Northern Ireland will usually be more expensive than the rest of the UK. Also – the rest of Britain is a bigger market than Northern Ireland so there is more scope in England or Wales for getting a good value car with a higher spec.
But it will usually be less time-consuming – to buy a car in Northern Ireland than it is to travel to Britain, and potentially spend more money on extras such as accommodation, food, and other travel expenses. Do your own checks on prices on sites such as Autotrader and factor in ferry and other travel expenses.

Paying for a car in the UK  in Sterling – what are the options?

Your Own Bank: If you just ask your own bank to do the currency conversion and send the money to the car dealer  – you will usually not get the best exchange rate.
The majority of the major banks will typically make between 2% and 4% margin on the exchange rates they use.
Getting a better deal on the EUR/GBP exchange rate could easily save you enough money to tax your imported car for a year.  For example on a £15,000 car purchase  – a difference of just 2% on the exchange rate would save you £300. (Probably enough to pay for the car on the ferry back to Ireland.)
Below – we have listed some of the best options for paying for a car in the UK.

Best Ways of Paying for a car bought from the UK

You could opt to use the online currency exchange marketplace Currency Fair. They are based in Dublin and are regulated by the Central Bank of Ireland.  You can pay in your Euros to CurrencyFair with an Irish debit card or by bank transfer. ( Many other exchange firms won’t accept debit cards.)   You can check their current live exchange rates below. (First five transfers are free)

Fexco  is based in County Kerry, Ireland and is a multinational financial and business solutions provider, with operations in 29 countries worldwide.   You can quickly request a quote online on the Fexco dedicated page for UK car imports. A Fexco broker will get in touch with you and once a figure has been agreed – you just transfer the Euro amount to Fexco and the seller will receive the Sterling into their account. (Same day if necessary) .
Fexco has been around since 1981 and is regulated by the Central Bank of Ireland, and by the Financial Conduct Authority for the conduct of payment business in the UK.

FairFx are London based foreign exchange specialists – and they also have an office in Dublin. You can arrange international money transfers for UK car purchases with FairFx  online or over the telephone.  You will get the personal touch from your dedicated broker. FairFx deal with personal customers as well as businesses such as car dealers.  You can call FairFx on their Irish number 01  5665546 or on their UK number (0044) 207 8582001

TransferWise is a UK based global business specialising in online international payments. Transferwise uses the mid-market exchange rate and has low upfront fees. As well as sending and receiving money overseas you can hold and convert money in a borderless multi currency account. TransferWise is authorised by the UK Financial Conduct Authority under the Electronic Money Regulations .

TransferMate is an Irish currency exchange company with plenty of experience in dealing with UK car purchases by Irish residents and also by Irish businesses such as car dealers.
Once you have set up an account with Transfermate you can just contact them to confirm the amount in sterling you have to pay and who to pay it to.
Transfermate will give you a rate and tell you how much you will need to pay in Euros. Once you transfer your Euros to their client account in Ireland the car dealer in the UK can be sent the Sterling on the same day – usually in a couple of hours. You can also reserve an exchange rate for a small refundable deposit and do the transfer when you are ready to buy.

When is the best time to buy a UK car ?

Car dealers are often open to negotiation when it comes to price, but they can be more open to a bargain at certain times of the year. In the UK, vehicle registration plates change twice a year, in March and in September. So towards the end of those 2 months , UK dealers can find themselves with a lot of used cars in stock that they want to shift because when lots of people tend to part exchange their old cars for new ones.

Brexit and UK Car Imports

Be aware – a no-deal Brexit might result in VAT being charged on UK used car imports to Ireland  – which would increase prices by 23%. Customs duty may also apply  (around 10%).
Brexit has been delayed until at least October 31st – but if you are thinking of buying a used car in the UK – you might want to do it sooner rather than later.
Even if there is some sort of a Brexit deal – there could still be VAT and customs duty on UK imports.

What are some other payment options when buying a car in the UK?

Paying with a Debit Card –  There are daily spending limits on almost all Irish debit cards  – (not BOI)  so this method may not be a viable option for most UK car purchases. Also, some sellers will have limits on how much they will accept by debit card.

Irish Debit Card Daily Limits are …

  • EBS: €2,000 ;
  • PTSB: €2,500 ;
  • KBC: €2,500 ;
  • N26: €5000 ;
  • Revolut – £5,000 over a 96 hour period.
  • AIB: €7,100 ( €5,000 max per transaction) .
  • BOI is the only one without a daily limit.

There will usually be a small “non-euro” transaction charge from your bank for using a debit card to buy in Sterling – but it won’t be more than €11.43 whatever you spend.
The exchange rate used will be the Visa or Mastercard Rate (which you still might be able to beat by using one of the currency exchange specialists mentioned above.)

If you get a debit card from a new online bank called N26 –  they won’t apply any extra charges when you making purchases in non-Euro currencies. N26 is an “online-only” bank, based in Germany and licensed by the European Central Bank  See N26 Bank Account.

Bank Draft –   not really a viable option. This involves getting your Irish bank to convert your Euros to Sterling and write a banker’s draft in Sterling payable to the car seller. Many UK dealers won’t take bank drafts because of forgery problems. Also – the exchange rate you get from your bank is likely to be a lot worse than the other options listed above and there are usually extra fees.

Cash:  Paying in cash is not really a viable option either. On larger value purchases most reputable car dealers won’t take cash. Even if they do – you definitely won’t get the best exchange rate on cash and there’s also the worry of theft or loss of the cash.

Credit Card – using your Irish credit card to pay for a car in Sterling (assuming your credit limit is big enough) is not really a good option. The exchange rate might be OK – but the credit card company will charge you between 1.75% and 2.65% on a foreign currency transaction. Based on an average of 2% – this would mean a charge of about €500 on a £20,000 purchase.  More here about Credit Card Fees When Buying Overseas

Other Costs to Consider when importing a car from the UK to Ireland.

VAT:  For VAT purposes – cars are considered not to be second hand if less than 6 months have passed since the date of first registration or there is mileage of less than 6000 km.
Second-Hand Cars are usually sold by dealers inclusive of UK VAT.  The sale is not liable to VAT if the seller is a private person.
Second-hand cars sold by a UK dealer to a dealer in Ireland  can qualify for zero VAT if

  • the seller has the buyer’s  VAT number and displays it on the  invoice, and
  •  there are commercial documents showing evidence of the car leaving the UK.

Buyers in Ireland currently don’t have to pay Irish VAT  on a second hand imported car from the UK. (Things will change after a no-deal Brexit though – VAT will probably be charged in full at the time of import.)

New cars exported from the UK to Ireland cars are currently sold without UK VAT. But Irish VAT is due on it when you import it.
A car is considered new if no more than 6 months have passed since the date on which it was first registered or if its mileage does not exceed 6000 km.

VRT Charges on Imported Cars:

  ( Vehicle Registration Tax) – Before you purchase any vehicle in the UK, ensure that you use the  Revenue VRT Calculator in order to find the potential VRT charges that you will have to pay here when registering the vehicle here.
The VRT  due on passenger vehicles (cars)   is based on a percentage of the car’s ” Open Market Selling Price” (OMSP) as determined by the Revenue Commissioners.  This percentage varies, depending on the car’s CO2 emissions.  (VRT Rates Here)   Lower emissions mean lower VRT. The lowest rate is 14% – rising to 34% for high CO2 emissions.

VRT Category B includes commercial vehicles, designed and constructed for the carriage of goods and not exceeding 3.5 tonnes. These vehicles are European category N1 and generally have three seats or less. VRT Category B also includes motor caravans.

The VRT is generally 13.3% of the OMSP and the minimum due is €125.

However, some N1 vans are charged a  flat rate  of €200 if they always had:

  • less than four seats
  • and
  • a laden mass greater than 130% of the mass in service.

9 thoughts on “Buying a Car in the UK – Best Way to Pay

  1. Hi,I plan on buying a car in the uk but can only get over on a sat or a sun,is it possible for funds to be released into car dealers account on the weekends ?

  2. What is the VRT on bringing vans with less then 4 seats from the uk to Ireland, Is it a set standard fee? or does it have the same VRT charges as cars


    • On Vans the VRT is generally 13.3% of the OMSP and the minimum is €125.

      However, some vans are charged a flat rate charge of €200 if they always had:

      less than four seats
      a laden mass greater than 130% of the mass in service.

  3. I’m planning on buying a car on Friday, outstanding balance £17250 and planning on paying this with my revolut visa card. It’ll cost me roughly €19670 (£65 revolut fee included in this as I only have the basic card) Am I correct in saying this is the best option for me or am I missing something??

  4. HI, I’m looking to buy a car from the UK and wondering if I use one of the above mentioned financial companies, when I get over to the UK and if I like the car, will I be waiting a number of hours for the money to be transferred into the Car dealers account before I can leave with the car?

    • It would be best to have the account set up with the chosen exchange company well in advance – (a couple of weeks).
      Then transfer your Euros to them a couple of days before you are buying.
      On the day – arrange a transfer to the dealers account . They will have cut off times to guarantee same day transfers – but in general a transfer request before noon should go through same day. Checked with Fexco – and if you have lodged cleared funds with them – they will do a same day transfer to a UK account if you order it before 12 noon. It usually takes about 2 hours.

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