Buying a Car in the UK – Tips on the Best Way to Pay

There can be large savings to be made by buying a used car from Northern Ireland or other parts of the UK and importing it to Ireland.

Buying a used car from the UK and bringing it back to Ireland can sometimes save buyers several thousand Euros. This is even after you factor in the expenses of travel, VRT etc.

Prices will work out even lower for Irish residents when the Sterling / Euro exchange rate favours the Euro. Sterling has been relatively weak against the Euro in recent months. See more about the  latest Euro Sterling Exchange Rate Here

In 2019, almost 50% of all new car registrations in Ireland were on imported cars. The total number of imported private cars licensed here was 108,895 an increase of 9.5% on 2018 . .


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

Using Your Own Bank will nearly always work out as the most expensive option. You will rarely get the best exchange rates from a major bank.
The majority of the banks will typically make between a 2% and 4% margin on the exchange rates they use.
Getting a good deal on the 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.


Best Way of Paying for a Car in the UK

Below – we have listed some of the best options for currency transfer when paying for a car in the UK.


CurrencyFair. is an online currency exchange marketplace with their HQ in Dublin.

CurrencyFair is fully regulated by the Central Bank of Ireland. All transactions are carried out online.

You can send Euros to Currency Fair by a bank transfer (free) or by debit card (for an extra 0.25% fee) . Then you simply convert the Euros to Sterling online. The rate and any fees will be shown.

There is normally a fee of £2.50 to send GBP – but you can get your first ten transfers for free using this link .

If you want to wait for a better exchange rate you can keep the money in their multi-currency wallet. You can top this up at any time, and transfer when you’re ready.

When you are ready to buy a car, you just login to your CurrencyFair account to send the Sterling from Currency Fair to the car dealer’s UK bank account.


fexco currency transfers

Fexco is based in County Kerry, Ireland and operates in 29 countries around the globe.

You can quickly request a quote online on the Fexco dedicated page for UK car imports. A Fexco broker will soon get in touch to sort out the details and get you registered.

Once an exchange rate is agreed – you just transfer the Euro amount to Fexco. and, when authorised by you, Fexco will transfer the Sterling to the seller. (Same day if necessary) .


Fexco also deals with currency transfers for Irish businesses such as car dealers who will be buying regularly from the UK.
Fexco has been around since 1981 and is regulated by the Central Bank of Ireland. They are also regulated by the Financial Conduct Authority for the conduct of payment business in the UK.


TransferWise is a UK based global business specialising in online international payments. Transferwise uses the mid-market exchange rate and has low upfront fees.
After online registration you just enter how much Sterling you want to send, they will show you the cost in Euros including any fees and the date when your money should arrive.

As well as sending and receiving money overseas you can hold and convert money in a borderless multi-currency account. You can then pay for the car when it is ready.

TransferWise is authorised by the UK Financial Conduct Authority under the Electronic Money Regulations.


Buying Used Cars in Northern Ireland

Buying a car in Northern Ireland will usually be less time-consuming than travelling to England or Wales. The travel expenditure will also be lower.

BUT – used car prices in Northern Ireland will usually be a bit more expensive than the rest of the UK. Also, there is more scope in England or Wales for getting a better value car with a higher spec. Before you decide on where to buy a used car – compare prices on sites such as Autotrader and factor in the ferry and other travel expenses.


When is the best time to buy a UK used car ?

Car dealers are often open to negotiation when it comes to price, but they can be more open to reducing prices at certain times of the year.

In the UK, vehicle registration plates change twice a year, in March and in September. Towards the end of those 2 months, UK dealers can find themselves with a lot of used cars that they need to shift . The end of February and August can also be a good time to get a good price because that is when the dealers will need to make room for the new cars.


Brexit and UK Car Imports

Be aware – a no-deal Brexit might result in VAT being charged on UK used car imports to Ireland from Jan 2021. This would increase prices by 23%. Customs duty may also apply  (around 10%).
Brexit is looming again – so 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 a Brexit deal – there could still be VAT and customs duty on UK car imports. More details on Car Imports and Brexit


Other payment options when buying a car in the UK.

Paying with a Debit Card –  This option may not be viable because of the daily spending limits on almost all Irish debit cards. Also, some sellers will have limits on how much they will accept by debit card.

Irish Debit Card Daily Spending 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)
  • Bunq €50,000 (*see below)
  • BOI no daily limit.

There will usually be a small “non-euro” transaction charge from the “old school” banks 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

Bunq Travel Card : * This is a prepaid Mastercard with no daily spending limits. (It is treated as a credit card by point of sale terminals.) Bunq don’t charge any foreign transaction fees and use the Mastercard exchange rate.
Visit Bunq here . Read more about the Bunq Travel Card here.


N26 :– If you get a debit card from the new online bank N26 –  they won’t apply any extra charges when you make purchases in non-Euro currencies. They use the Mastercard exchange rate – which is usually about 0.25% over the interbank rate.
N26 is an “online-only” bank, based in Germany and licensed by the European Central Bank
You can find out more and sign up here for an 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 the 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 it has 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 could change after Brexit though)

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.

NOx Tax

Since January 1st, 2020 the new NOx (nitrogen oxide) tax could add a big chunk to the price of older diesel cars. For example A 2014 Golf 1.6 TDI could end up with a NOx charge of €1,510 because of its emissions of 118mg/km. So it will pay to avoid “dirtier” cars and try to look for ones with loe NOx emissions.

  • For example a 2014 BMW 520d has NOx emissions of just 17mg/km, so would only be charged €85 tax here.
  • A 2014 Toyota Prius has NOx emissions of just 8mg/km, equating to a NOx charge of €48.
  • Avoid the 2014 Ford Focus 1.6 TDCI diesel which would be charged a whopping €2,385 in extra NOx tax, on top of the approx €1,500 of “regular” VRT to import.

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

  1. 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.

  2. Hi Wojciech, can you send an update when you have one, looking to buy with revolut too in the next few weeks!

    • Be aware that Revolut has a fee-free exchange limit of £5000 per month. Once you go over that you will be charged 0.5% . So on a transfer of €20,000 into GBP, you would be hit with a fee of €75

  3. Under EU rules – You are covered by a minimum one year legal guarantee when you buy a used car from a professional seller. The guarantee covers manufacturing faults, for which the seller is responsible.

    Under EU law, you may invoke your guarantee at any dealer in the manufacturer’s network, regardless of the EU country in which you bought the car. So if you buy your car in UK and take it back with you to Irelannd , you can go to a car dealership for that make of car that is close to your home to ask for a manufacturing fault to be remedied (within the guarantee period), rather than travelling back to UK.

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