Getting Points for a Car Purchase

by on August 27, 2011 · 31 comments

in American Express, Points Guy Pointers

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A friend of mine was in the market to purchase his first car recently and asked me to help maximize the amount of points he could get from the purchase. Originally he was going to pay cash, but after talking through the benefits he decided it would make sense to put as much on a credit card (and then immediately pay the card off with his cash) and then finance the rest.

The reason why he decided to take out a relatively small car loan was that since this was his first car purchase, it was a good opportunity to boost his credit score. FICO scores have many different pieces, but generally the more types of credit lines (credit card, mortgage, car loan, etc) you have in good standing, the better your score gets since diversity accounts for 10% of your score.

Secondly, he wanted to maximize the points he got for the purchase for several reasons:
- to hit the minimum spend on the Premier Rewards Gold card
- to get closer to the $30,000 spend threshold, which gets you 15,000 extra bonus Amex points on the Premier Rewards card
- to simply accrue more valuable American Express Membership Rewards points

Throughout the buying process, I discovered that most dealerships have a $5,000 credit card limit, but that number is easily increased with the approval of a manager. However, I didn’t let them know about our credit card plan until the very end, because I figured they’d just factor the cost of the charge into the final price during negotiations.

My friend negotiated the price of the car to a number that he was happy with and then to close the deal that day, his only stipulation was that he wanted to put $20,000 on his credit card. I knew this would be a stretch, but hey - it never hurts to ask. 

In the end, the dealership allowed $12,500 to be put on the card, which my friend and I considered a success. You have t0 understand that the dealership really doesn’t want you maximizing your credit card spend, because they have to pay 3%ish in credit card processing fees, plus money put on the credit card means money that can’t be financed through a loan that they are making money off of.

However, in the end car salespeople want to make a sale, so never forget your leverage – walking away from the deal. I am by no means a car buying expert, but thought I’d share the details since it is important to get as creative as possible when finding ways to maximize credit card spend, especially to meet ever growing minimum spend requirements.

I’d also love to hear others’ experiences with car buying/leasing. What’s the most you’ve been able to get a dealership to process on your credit card?

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • PJ

    if you happen to have a major purchase say $4000 to fix up the front door, split them into 4 cards with sign on bonus; there can not be a better time to put on 4 AMex gold Premier

    those 4 X 125 K is worth more than 4000 to me :)

  • Megs92

    I just bought my first car a week ago and the dealer (a small operation) said I could use a CC, but would have to pay half of the 3% fee. At that point – even to meet a minimum spend – the 1.5% cost was too much for me. I’d rather pay the small fee to buy up pre-paid Visa gift cards at the drugstore if I get down to the wire and can’t finish my spend. Great post, though! Maybe this works best with a new car purchase.

  • Miltoncapital

    How about financing your car for FREE via credit card?? You put $20k on your credit card and then do a 0% balance transfer for 24 months to a different card and ask to have the balance transfer fee waived. And then with the $20k cash you had put it into Hungarian bank deposits which are now yielding 9%! :-)
    Now that’s a great arbitrage…

  • Phil

    interesting but i a m 100% certain your friend did not get the car as cheap as he could have. if he’d got the dealer to their real base price there is no way the sales guy would allow it to go over as he’d lose all his commish. getting points is nice but when i bought our last cars i used the info on and got very large discounts. don’t forget cash is king!

  • Phil

    Urgh that sounds like a great way to blow up $20k to me. “Arbitrage” usually = “dumb money”

  • Phil

    should add the new amex mb card gives 5x membership rewards on purchases from mb. as an mb driver whose lease is up soon i look forward to being able to put the 5k at 5x on the card!

  • Sam

    Agree with Phil. Just bought a Prius for $1800 under invoice when they are selling for $500-$800 over invoice. Manager said the most I could put on a cc was $2k. Sounds like your friend could have gotten a better deal. I chose the .09% financing instead of the miles

  • Miltoncapital

    Arbitrage dumb money?? Arbitrage is the smart man’s ways of taking advantage of imbalances in any market place. It’s one of the basic fundamentals of capitalism. Actually it’s what we all do with points/miles as well..

  • LarryInNYC

    Always worth remembering that a new car depreciates in value by 10-15% the moment you drive it off the dealer’s lot.


    I bought my motorcycle a couple of years ago on my visa card. I put all $9500 on my credit card. The dealer was more than happy to do it for me, with the bonus that NWA was having at the time, I got almost 50,000 miles out of the deal!

  • Cbr600f4i2

    0% rates for 24 months don’t exist anymore not to mention the fact that they also don’t waive that balance transfer fee.

  • Miltoncapital

    They sure do. Citi Platinum Select has a 21 month offer now @ 0% and they waive the fee if you are lucky.

  • BruceCars

    There’s a guy over at Million Mile Secrets today who claims he can buy a new Mercedes and charge the full purchase price to the new AMEX Platinum for Mercedes Benz and that will earn him 350K Membership Rewards Points as well as a$1000 discount on the purchase price and that even if he paid a 3% fee to use his AMEX he still would be way ahead.

  • Charles Clarke

    Thank you for this entry on what is possible. Knowing that 2.5X the stated limit is possible is good to know.

    Good reminder to negotiate on the amount you can put on a credit card at the dealer. I didn’t do that… And meeting minimum spend or multiplied points is nice also. Learn the game, the techniques and then practice them!

    Note to folks that have commented on “new cars”. If you’re buying a used car at a dealer, this works also. You don’t have to buy new. Whether you could save more than you’d gain from this by buying from a private party is a different question.

  • Michael Acevedo

    Well I didn’t do this for a car, but for my school loan this semester I did something similiar.

    3k is owed each semester, thats just tuition and school fees. I paid the entire amount on my BA card (2.7% extra for using a card) and then quickly switched it all over to my citi 0% balance transfer card. With the money I had saved for the semester, I put it in a 3-month CD so that by the time the new semester comes, I’ll pay off the card and do it all over again. Not sure if the 0% balance offer will still stand, but nonetheless at least I made some points.

  • Tormapleaf

    If you have to pay 2.7% to use the card, doesn’t that exceed the value of the miles earned? I look into paying my daughter’s tuition on my card but there was a 3.29% fee so I paid cash

  • Jeff

    My wife and I bought a Prius. We were able to put $3000 on the credit card. I asked to pay some in cash and they agreed. I told them I’d need help getting the cash from my car. They were confused. I explained I had $5000 in dollar coins (obviously this was when the Mint deal was still going on). My wife was both amused and slightly embarrassed. In the end they wouldn’t take them as they couldn’t fit them in their vault. After arguing I gave in as it wasn’t worth the effort. I was mostly curious to see if they would take them. But it was entertaining.

  • Gpapadop

    I am in the process of buying a car now and playing two dealers off each other. One would let me charge $2k and the other $3k on my Amex Business Gold Card.

  • gavinmac

    I’ve heard that some people try to get around a dealer’s $5,000 credit card limitation by arguing that it violates the dealer’s merchant agreement with Visa to cap the customer’s credit card usage, and if the dealer doesn’t let them charge the full amount they will complain to Visa, etc. I have no idea if that works.

  • Jon

    Unless it’s a Honda. My ’10 Civic (purchased a year ago) is worth the same used today as what I paid for it brand new. On top of that, I was able to get a loan with 0.9% interest, making it pointless to pay cash for the car. I also found someone else on that traded in his 2-yr old Civic for only $200 less than what he paid for it brand new.

    In most cases, used cars are a better value than new. Though with the recent shifts in the economy, there are some circumstances that cause new cars to be a better value than used cars.

  • John Denison

    A very timely thread as I am leasing a 2012 Mercedes-Benz this week. The dealer did, indeed, say the cap for a “down payment” via AMEX Plat is $5,000. And no I don’t pay the transaction fee.

    As for Million Mile Secrets’ post on another blog, there has been no follow-up to let us know if his quest to buy the whole car on his AMEX was successful.

  • Nathan

    Hi TPG, I’ve not bought a car since Jan/2007, but $3,500 of the purchase price was on a credit card. However, when I bought a boat (a runabout/fishing type) later that year, the dealer allowed me to put the whole (nearly $10k) purchase on my credit card. Unfortunately, that was long before I was aware of the mileage and point benefits. All I was getting in the way of credit card perks back then was a 1% cash rebate…

  • Nathan

    ?? And how does that pertain to airline miles or credit card points?

  • bluto

    I was able to charge $10k without a fee to my credit card recently. One trick is to put $5k upon ordering the car, and then when it arrives at the dealership a few weeks later, request to put another $5k on your card. I think it helped that it was two different dates. Also, I agree about negotiating the price first, otherwise they will factor in the credit card processing costs and inflate your price to adjust for that. We ended up getting a very popular car for barely above invoice.

  • PJ

    12,500 max on plaxtics?:) you can get 12 signon bonus on 12 AMEX GOLD premier cards.. etc etc i would have done this line up 2 amex golds 2 citi visa and 2 citi amex that is 13000K to max out the bonus or if you have 3 head counts 4 amex golds for sure and 4 citi visa and even getting a Platinum paying 450 to get 100K that is 8 X 75K + 100K and 3 10K referral for refpremier :) that is 13K spend met with close to one purchase

  • PJ

    you could have put on 5 amex cards pal :) those good guys at AMEX can even rush cards voer to you overnight NO charge

  • PJ

    again, next time line up more cards with signon bonus

  • jb1907

    dumbest plan ever to boost a credit score. guy already has a plat card and gets a car loan….

  • jb1907

    and there is a “law” against dealers letting you buy a secured asset with an unsecured credit card. not to mention the 3%.

  • jb1907

    they ALL depreciate the minute you drive off the lot. Try selling the car back to dealer a week later. you won’t get what you paid for.

  • jb1907

    the dumb part is if you have $9,000 in service work, they will take credit cards.

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