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 .

Buying a car in Northern Ireland , England, Wales or Scotland will usually end up costing a lot less for Irish residents 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.

But be aware – a no deal Brexit could well  result in VAT being charged on UK used car imports – which would increase prices by 23%. Customs duty may also apply  (around 10%) .
So – if you are thinking of buying a used car in the UK – you might want to do it before the end of March.
Even if there is some sort of a Brexit deal – there could still be VAT and customs duty on UK imports.

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.

It is much easier – and less time-consuming – to buy a car in Northern Ireland than it is to  travel to Britain, and potentially spend more money on things such as accommodation, food, and other travel expenses.

The rest of Britain is a bigger market than Northern Ireland so there is more scope for getting a good value car with a higher spec. But the extra travel costs – such as ferry and fuel and maybe a hotel will take a chunk out of any savings .

The number of used (imported) private cars licensed in Ireland rose by 7.5% to 99,456 in 2018 compared with 92,508 in 2017.

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 probably 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 ferry back to Ireland.)
Below – we have listed some of the other options for paying for a car in the UK

Best Ways of Paying for a car from the UK

Fexco  is based in Ireland and is a multinational financial and business solutions provider, with operations in 29 countries worldwidefexco . They can offer car buyers more competitive exchange rates than the main banks .  You can quickly  request a quote online on their dedicated page for UK car imports . 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 have been around since 1981 and are regulated by the Central Bank of Ireland, and by the Financial Conduct Authority for the conduct of payment business in the UK.

TransferMate  is an Irish currency exchange company with plenty of experience in dealing with UK car purchases by Irish drivers and also 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 too . Transfermate 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  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.

You could choose to use a fully online currency exchange marketplace such as Currency Fair. They are based in Dublin and are 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.

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.  They 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) 20 7858200 . Ask for Niall – and he will make sure you are looked after.


What are the other options?

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 many UK car purchases. Also , some sellers might 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 ;
  • 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 a 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 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 probably 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 fOK – but the credit card company will charge between 1.75% and 2.25% on a foreign currency transaction. Based on an average of 2% – this would mean a charge of about €500 on a £20,000 purchase.

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

VAT:  For VAT purposes – cars are considered not to be second hand  if less than 6 months has passed since the date of first registration or there is mileage of less than 6000 km.
Secon Hand Cars are usually sold by dealers  inclusive of UK VAT  .  The sale  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 Irleland currently don’t have to pay Irish VAT  on a second hand imported car from the UK. (Things willchange 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:- 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  is based on a percantage 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 means lower VRT. The lowest rate is 14% – rising to 34% for high CO2 emissions

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

  1. If i want to purchase a car in Northern Ireland, but i have only the deposit and need a loan for the remainder, what would be the best way to go about that? Or is that possible while avoiding the excessive personal loan rates of Irish banks and credit unions? I note car dealers are offering 5/6% car finance in Ireland

  2. Hi, I’m looking to import a car from the UK. The car was first registered on 30/07/18. Will this car be considered used after 30/01/19 (6months) or will I have to wait till 6 months have passed ie (February 7months). I’ve tried in vain to contact revenue. Nct who carry out inspection said they can’t answer and citizens advice can’t answer either. Could cost 6k VAT if I get this wrong.

    • The rules state that a vehicle is classe as new means for VAT purposes if either of the below applies:

      it is less than six months after its first registration
      it has travelled 6,000 kilometres or less

      So – in our opinion , a car registered on 30/7/18 will be more than 6 months old on 31/1/19 and should not be liable for VAT (as long as the “mileage” is over 6000km (about 3730 miles))

  3. 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. It won’t be instant – it could take upto 4 hours.
      We will try and find out more about transfer times and come back to you.

      • 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 I was told.

  4. I have a car picked in the UK – (I’m in Ireland) the money in the bank but the car company only accept visa debit or credit cards. The value is 24k gbp – is there some sort of card I can top up and pay with before I go ?

  5. Hi,
    I am interested in purchasing a car in northern Ireland through finance. I live in the south of Ireland. Can you tell me the names of finance companies that will finance cars purchased in northern Ireland as I have learned some won’t.

    • We don’t have a list of companies that will offer car finance on a UK purchase.
      You might need to get a car loan instead. PTSB and many Credit Unions will provide car loans in Ireland for UK purchases.

  6. 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??

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