There are several ways to pay for a car at most car dealerships. You can pay cash, pay with a cashier’s check (as most of the dealers don’t accept personal checks), pay with a credit card, or take the dealer’s finance. Often those who are interested in buying a car on a credit make searches on the net with the phrase Can you buy a car with a credit card? – This article provides you with quality info on the same.
Why Credit Card?
There are numerous reasons to go for buying a car using a credit card, as long as you are equipped to make the payment in full. The reasons are given here below.
- It can be impractical and inconvenient to pay in actual cash.
- No rewards can be earned.
- If you go for paying with a cashier’s check, banks will charge a fee for issuing the check.
But, if you are paying for your car with a credit card, you can earn rewards such as cash back, airline miles, or another type of reward offered by your card. Since you will have to shell out a huge amount to buy a car, using a credit card for this purpose will earn you a substantial reward. For instance, if you are buying a car for $20,000, and if your card has a 1% cash back policy, you will get back $200 from it.
It is important to bear in mind that when you buy a car using a credit card, you have to have ready cash to pay the credit card bill when it is due. In case you do not have money, it does not make sense to buy your car using a credit card, as it comes across as one of the most costly types of debt. If you get your car financed by a dealer or get a loan from a bank or credit union, your rate of interest will be cheaper than the one on your credit card.
Can You Buy A Car With A Credit Card?
Yes, in some cases buying a car using a credit card is possible. But, there are some considerations that you should make.
1. Check With Your Dealer
Check with your car dealer to ensure that their policy allows you to use a credit card to buy a car. Also, check to know the credit card types that they accept. If you want to pay for your car only using a credit card, you should be ready to walk away in search of a dealer who will let you do the same.
2. Get To Know Your Credit Limits
Find out the credit limit on your credit card. If you are using more than one credit card, get to know your credit limits on each of them. This will help you know if you can make the entire payment for your car using one single card or if you will have to split the payments among your different cards.
Besides, you will also have to determine how to split the payment amount. In case your credit limit does not allow you to make the entire payment using credit cards, you will have to make part of the payment with hot cash or with the cashier’s check.
Another aspect that you can do is to contact your credit card issuing company and ask them for increasing your credit limits. Many a time, they do such favors. But it may take some time. So, do not wait till the final minute to give this method a try.
3. Alleviate The Risk Of Card Denial
Let your credit card company know that you are going to make a huge purchase. This is to prevent the declination of the transaction on grounds of suspicion of fraudulence.
When you make an enormous purchase using your credit card which is usually out of your usual spending habits, it could be tagged as possibly fraudulent.
So, before buying a car with a credit card, call the fraud department of your credit card issuing company, and let them know of the huge purchase you are to make.
They will assure you that they will take care that nothing goes wrong. You may be given a number to call in case there is a problem with the transaction. This will ensure that the transaction is carried out smoothly.
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Tips on Buying a Car Using a Credit Card
1. Ensure that you are getting a good deal: Start the purchase by bargaining a reasonable price on the card. It pays to do some research well ahead of time. You can do this method successfully by going through car pricing guides. Several good websites are available over the net. If the dealer is too willing with your negotiation, it is a sign that you need to re-examine the deal. The price that you have bargained for, maybe too high.
2. Tally up the move: Whatever the reason you are using a credit card, it would be wise to tally up the benefit you will receive from the move. For instance, if your card offers 2% cash back, and you pay $5000, you will receive $100 back. In case you are using a credit card for $5000 because you don’t have money, calculate the interest you will be paying and add it to the car’s total cost.
In case you find out that a high-interest credit card is your only option and your circumstances don’t allow you to pay back in full, you should reconsider using a credit card for buying a car.
3. Don’t have a blurred vision: Do not be too focused on the rewards that you fail to recognize the savings that you can make. Thoroughly evaluate your deal so that you do not miss out on your $1000 plus savings just for a few hundred dollars worth of rewards. Also, avoid opting for a car that is not selling well.
4. Let your card use remain a secret for a while: Conceal it from the salesman that you are planning to use a credit card for the purchase. This is because the salesman may not reduce the price enough if he knows that the dealership will have to pay a transaction fee on your purchase. In fact, no dealership wants you to purchase their car on your card, but they do it just in order to make you happy.