Sunday Reader Question: Is It Possible to Buy a Car Using a Credit Card to Maximize Points?

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TPG reader Rob asks: “Are there any creative ways to pay for a new or used car with a credit card – i.e. say you want to pay cash for that new Volvo SUV, or the new BMW, or Chevy or Audi for that matter, is there a way to pay for the entire purchase on a points-earning credit card (assuming you have the credit limit)?”

In short, most car dealerships accept credit cards and thus it is possible to use a card for a portion or entire purchase. However, dealerships have to pay a fee (usually around 3%) to the credit card issuers for accepting your payment, so expect them to build that into the purchase price. If you negotiate an amazing deal and then ask to put it all on a credit card, expect some major resistance. However, if you are paying top dollar for a car that isn’t being discounted, your leverage point can be that they have to accept a credit card for the entire purchase. If the dealership is making a lot of money off of you (especially with used cars) you can expect them to play along more. Clearly they will want you to pay as much as possible in cash, but if they think you will walk away if you can’t put it on a credit card, they will be much more willing to eat the credit card processing fees.

So I basically recommend going in and negotiating the absolute best price that you are comfortable with – and then let them know you need to put X amount on the credit card. That way, you know you got the price you were comfortable paying cash and anything you can put on credit card is a bonus and not just built into the price of the car.

Feel free to comment about your successes/failures trying to pay for cars with credit cards!

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