Has anyone had experience with using a Credit Card for a deposit on a new vehicle? I'd be interested in knowing if you were successful. The last time I bought a vehicle, I was told I could not use a credit Card, that it was not allowed. The salesperson made it sound like there was some legal implications attached. So, how can I get around this B.S.? All the car buying sites tell you to use a credit card but what is the magic formula to actually using it?

I'm in Michigan if that helps any.

 

I dunno, take a cash advance out on the credit card and give the dealer the cash. Watch it though, a lot of times the interest on cash advance is higher than on puchases. Depends how fast you can pay it off on whether that matters or not.

 

This is an individual dealer decision, not a law. The reason we do it is simple: the use of credit cards cost businesses money, typically 2-3%. The low margins we work with on new vehicles means it's quite costly to accept credit cards for payment, and federal laws prevent us from passing those costs on to the consumer. (Remember when gas stations had 2 prices for gas, one for cash and one for credit? They stopped doing this not because they're such nice corporations, but because Washington said it was a no-no.) My dealership allows a customer to put up to $2,500 of their vehicle purchase on a credit card. We just aren't willing to absorb any more than that. By the way, a dealer is supposed to post their policy on this where it can be clearly seen and read by the public, as their service department usually will accept a credit card for payment in full. I know this seems like a double standard, but it's perfectly legal if it's posted.

 

I think I need to clear something up. My concern was for the use of a credit card for the "deposit" on a vehicle. Like perhaps 500.00 or a 1000.00 or so to "consumate" the deal. It seems from what I've experienced, dealers are reluctant to accept credit cards for "deposits" on new vehicle orders.



(Now... if I had a 40,000.00 credit limit on my card to buy a vehicle outright that would be a different matter! I'd either be very rich or very dumb, given the interest rates. lol)

 

Yeah I guess I wasn't clear either. Thats what I ment, take $1000 cash advance on the card for the downpayment. I did this once, then paid that off when I sold my old car privately, instead of trading it. Like I said though, cash advance rates are usualy higher, so maybe its not an option if you can't pay it off reasonably quickly.

 

For a deposit that seems very bizzare that they would not accept it. Would the $500 or $1000 go against the price of the vehicle or would you be financing the total amount then get the $1000 credited back to you?

 

The credit card deposit would go against the purchase price.

The reason I was looking into using a credit card for the deposit is that the "Car Buying Experts" all say to use a credit card for the deposit in the event your deal goes south. Thus, you have a means to dispute the deposit through the credit card company. These experts tell us if you use a check or cash, you may as well kiss your deposit good bye if the deal goes bad.

Thanks again....

 

yo,
"... all say to use a credit card for the deposit in the event your deal goes south." agree


"Thus, you have a means to dispute the deposit through the credit card company." agree

"These experts tell us if you use a check or cash, you may as well kiss your deposit good bye if the deal goes bad."
Took us 2 visits and 3 letters to get back a $100.00 deposit in a new van. They had the most incredible excuses for not refunding it.

...

 

FXDL;

You need to find a dealer who'll talk the same language.

I've used my Visa card for $500 downpayments on three trucks and two cars, and then put $2500-$5000 onto the vehicle before I write a cheque when I pick it up, depending on the dealer's house rules.

The deposit Visa was to protect myself in case the deal did "go south", and the $2500-$5000 was to get the Visa points, which we use for travel.

When we bought my wife's old '96 Grand Am, we made the deal using a Visa down payment, made a pre-payment of $18,000 to Visa and actually used the card to pay for the vehicle. Needless to say, the dealership wasn't happy about that one!

The next time we were there, they had a sign up that read "Maximum Credit Card Purchase $1500".

True Story!

Rick

 

MarkII is right. It costs businesses money to accept Visa, Mastercard, Discover, etc. If I could show you a way to increase your profit by 3%, wouldn't you be interested? Don't take plastic.

They are all set up to take plastic, if their parts or service department takes it. If that is really what you want to do, tell them that is the only way the deal will go. If they want your business bad enough, they'll find a way. If they don't, I would recommend not doing business with them. What's gonna happen when you need something repaired? Their service to you hasn't showed anything great in buying the car, do you think the service will be any different?

We just bought a new car. The dealership we dealt with was nothing but great to deal with, no pressure, let's see what we can do, we'll get your vehicle from out of state for 'free'. Had to have a few things like headlight adjustment, molding re-installed, and all with no questions asked and the utmost professionalism.

 

That is funny. My mom bought a ZO6 Vette last year on her AMEX card for the points. Then she just wrote a check to AMEX. I wish I would have been there to see the salesman when she tossed out a credit card for a $50K car. She got a boat load of miles on her card though. Wish I had the cash on hand.

 

FXDL,

Sounds like you have been doing your homework, but if you haven't checked out, carbuyingtips.com ....do so. I just bought a 2003 Subura Legacy Outback and put $1500 down on my card, for the miles. I saved about $3500 on my car by using some of the strategies on, carbuyingtips.com and the information and fax attack from "Fighting Chance" The best way to get some results is to walk out the door. If they won't deal with you on that small of an issue, God forbid you have to deal with them on something else! Using a card is the best insurance for you if the deal does go south.

Happy Hunting,
Bruce