Don’t leave points on the table: Buying a car


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I recently purchased a new vehicle from a dealership and ended up financing the vehicle through the dealership.   I needed to put money down to secure the low interest rate offered so the the agent requested I bring in a check with the down payment we agreed upon.  I was about to hand over the check of the full amount but decided to ask a stupid question whether I could pay any of the down payment by credit card.  She replied “Of course, you can put up to 5,000 dollars on a credit card and the rest will need to be paid cash (equivalent).”  Awesome! This may be obvious for most but I didn’t expect they would allow that.
While 5000 points or ~100 USD is not a big sum of points/value in the grand scheme of things (especially compared to the price of the car) I never want to leave points on the table.  Furthermore, 5,000 of spend can be especially lucrative when used toward meeting a minimum spend.
The amount you are allowed to pay by credit card for a down payment on a car varies by dealership/financier but from others experience and mine, they don’t immediately volunteer their policy up front so it is always worth asking.

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About alex

Alex loves to travel and does so a lot. Logging 100,000 flight miles each year over the past 4 years, Alex uses points and miles to power his passion. Alex is continuously striving to experience the far reaches of the globe. In his day job, Alex is a Management Consultant frequently on the road advising Technology organizations. I love thinking about, reading about, and talking about all things travel. Feel free to reach me at pmmalex@gmail.com

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Comments

  1. We just did the same thing. Bought a car put 10k down on the British Airways card (3k more to go) and financed the balance with 0% interest. When we negotiated the price we told them we wanted to put 10k down and they mumbled that 5k was their usual max, but they could do 10k. I suspect if I really wanted to push it, I could have put the whole car on a credit card. By the way, I beleive according to visa merchant terms and conditions they can’t limit the amount of charge, even though most dealers try to.

  2. I did the same thing years ago when I bought my car. At the time they limited me to 2500 on the card. The only reason that I can think of for car dealers to limit that amount that you charge is the fee that they have to pay to the credit card companies. I think that Visa & MasterCard charge 3-5%, and Amex charges up to 7%.

  3. Once the deal is negotiated I have found that thy will waive their policies and let you put whatever on your card-if they think you are going to walk away. Last vehicle I bought they wouldn’t let me do it so I walked out the door. First thing the next morning they called and told me to bring my card and come pick up my suburban. $37,000 on the card and a 50% bonus at the time–I was very happy.

  4. Just be careful if putting a down payment on a leased vehicle. While the points are nice, if the vehicle is stolen or totaled, you’re pretty much SOL on the upfront cash. Less down is always better on a lease.

  5. This totally varies by dealership. This is negotiable like anything else. I bought my 2010 lexus and put the whole thing on a credit card(actually 2 cards as I maxed out my limit) I negotiated that AFTER we had agreed on the price. If they said no, I was fully prepared to walk to the next dealership.

  6. They’re usually much more accommodating at the dealership if you’re willing to finance. Buying the whole thing on a credit card probably wouldn’t work. Paying $5K as you suggested and financing the rest earns the dealer a bonus for making a new loan.

  7. I told the dealer I wanted to put the whole thing on my amex and he said amex doesnt allow it. I pulled out my card and started to call the number on the back and he said that he’d have his finance guy make the call. (I knew it was BS, but we were playing a game and it was his turn, so to speak).

    A few minutes later he said that they had the OK, but would I be interested in a $500 discount in exchange for an all cash deal. I said “how about a grand” and came back an hour later with a cashier’s check. (a 40K car would have cost him 2x-3x that).

    I had called Amex earlier in the day saying that I might be putting thru a 40K charge. In that conversation with them they told me that dealers don’t like to take the card for the whole amount, but if they refuse, to call. Their merchant agreement says they can’t refuse.

    Of course, the new regs that allow merchants to pass along the card fees will have changed the balance of power.

  8. Nice tips. I was wondering about this recently. Easy points I say.
    How about paying for the car with the points card then refinance it through one of the airline programs for more points. I’m not 100% sure who does the refi loans currently but I know different airline partners have done this through the years. Then find a way to pay the loan off with another points card transaction like through bluebird, etc.

  9. We paid for our new car in 1994 with our credit card. We’re away ahead of you guys. And I mean the whole thing. Called the cc comp right there and got our credit limit increased on the card.

  10. Interesting read, in 2001 we bought my wife’s toyota highlander with a credit card, ( about $24k then) we made our best deal, then whipped out the card, at first they refused, but as we were walking out the door, the decided it was the cc or nothing.

    I had the total saved up before hand to pay the card off too.

    * and still driving the toyota with only minor repairs, and put aside enough for the next car.

  11. Brant Jackson: Wow! $37K? The max I’ve been able to put down with a card is $4K, with their arguments being “It’s an AmEx … fees… blah blah”. Next time I’m walking…

  12. let the ball be in your court when negociating, if they say no just walk away but most of the time they will crumble and let you charge any amount. I ve bought many cars with this method.

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