Using a credit card to pay for some or all of the cost of a vehicle isn't uncommon. But a new credit card partnership between Capital One and Vauxhall offers the chance to earn money off the cost of a new car or van via a rewards credit card.
The Rewards Points you can earn from the Vauxhall Rewards credit card could shave up to £1,500 off the purchase of a new Vauxhall, depending on the model you go for.
I should say upfront you'll need to be aged 21 or over, have an excellent credit history and earn at least £20,000 a year to be considered for the card.
How the Rewards scheme works
Each Rewards Point you earn is worth £1 off the cost of a new Vauxhall vehicle. And like many reward and cashback credit cards at the moment, the Vauxhall Rewards card offers a higher initial rate of rewards.
In this instance, you can initially earn Reward Points worth 6% of the value of your spending. This is capped at either £3,000-worth of spending or the end of your first three months of having the card, depending on whichever point is reached first.
So you can earn a maximum of 180 Reward Points before the rewards value then switches to 3% of the value of your purchases.
To earn the maximum £1,500 discount, you would then need to spend £44,000 (or around £1,000 a month) on your card before the end of your fourth year.
Make money from your spending with a cashback credit card
That's because the points expire at the end of four years.
Depending on how much you spend on food, entertainment and holidays each month, that figure isn't entirely unrealistic.
Whether you want to use all that spending to pay for a new Vauxhall is another matter.
The card also offers membership of the Vauxhall MasterFit Service Club and no interest to pay on purchases for the first six months you have the card.
If you don't pay off your balance in full each month, the card has a representative APR of 17.9%. Of course, paying interest will soon wipe out the value of the rewards points you've earned.
Pros and cons
Of course, if you're not a fan of Vauxhall vehicles there's absolutely no point getting this card, and I'm surprised you've read this far.
Even if you are very keen on them, there are several things to be aware of.
The amount of Rewards Points you can spend is capped depending on the model from 500 on the ADAM and Agila to the maximum 1,500 on the Ampera and Insignia.
Here's a complete breakdown of those caps.
With a new ADAM retailing at around £10,000, £500 is only a small dent in the price.
And you can only buy a car from a participating Vauxhall retailer.
If you're a pretty big spender and love the idea of a new Vauxhall then this card might be appealing due to its fairly generous rewards points. But bear in mind that using the Rewards Points might limit your ability to haggle any further discount off the car.
Cashback card alternatives
If you want to earn cold, hard cash and have a choice of cars, then there are several decent cashback credit cards out there.
The American Express Platinum Cashback card pays 5% cashback in the first three months you have the card up to a limit of £125.
What's more, there's a flat cashback rate of 1.25% on all of your spending after that, irrespective of how much you spend. Each year you have the card, in your anniversary month the cashback rate doubles to 2.5%. However you do need to spend £10,000 in the previous year to qualify for this special 'anniversary' rate.
There's also a £25 annual fee to take into account. This card has a representative APR of 18.7%.
For the first three months you have the Barclaycard High 5 Cashback card it pays a cracking 6% introductory rate on your top five purchases giving you the chance to earn up to £120.
After that, you'll get 2% cashback on your five biggest purchases each month, and 0.5% on everything else. That's as long as you make at least 15 purchases each month. Plus the rate will double to 4% for one month each year to mark your anniversary with the card, although again only on your top five purchases. Note that it has an annual fee of £24. It has a representative APR of 24.8%.
If you don't want to pay a fee, the American Express Platinum Cashback Everyday card pays 5% cashback over the first three months.
After that you enjoy a tiered rate of interest depending on how much you spend. Spend up to £3,500 over the next nine months and you earn 0.5% cashback, spend up to £7,500 and you get 1% cashback, while spending above £7,500 will bag you 1.25%. the APR is 19.9%.
Earn free flights with these credit cards