MilesBuzz! - Miles opportunity, credit card at car dealer?

I'm sure someone here has experience in this........

My wife & I are getting a new car over the weekend. Due to a bad situation 2 cars ago, we were "under water" on our car loan about $8,000. OUCH. But, no matter, we have the cash and will pay it off when we trade in the vehicle on Saturday.

A mileage scheme came to mind on this....tell me if you think this would work.

Figures estimated for ease of calculation

Buy the new car.....$17,000 (inc tax & doc fees)
Trade in old...........$7,000
Balance on loan......$15,000
We owe................$8,000 (in negative equity)

So instead of just cutting the dealer a check to release the title from the lienholder, what if I charged that? Would most dealers accept this? Is it something I should even try, or am I an idiot :)

-A

There is a thread on buying cars with credit cards and getting mileage, which was active over the last year or two. Try searching through Google, etc. (either in this forum or Amex forum would be my guess). The key seems to be that different dealerships have different internal policies on how much of the cost they will allow you to use a credit card for. The discussion may give you some clues to your question.

More than one thread, actually, in all the CC forums and elsewhere.

Bottom line is that dealers don't like it. You can probably force them to take it if you're sufficiently hard-a$$ed about it, their merchant agreement says they have to, but it may totally mess up your relationship with the dealer down the road. Do you care?

(In my situation of this sort, I worked out a win-win for something I wanted anyhow: they gave me a LoJack anti-theft system at no charge. Its price was about what miles for the car would have been worth, but it cost them a heckuva lot less than their CC fee would have been.)

As has been said, dealers don't like it, but can negotiate. I recently bought a new car ($20,000) and had found the best offer from a local dealer and was paying cash. Initially, the dealer didn't want to put anything on a credit card, but relented when I suggested I would have to check with other dealers. I am probably not the best negotiator, but we settled for $5000 on the CC.

Bruce

I've put a downpayment on a credit card a couple of times. Usually a few thousand ($2-5K). What I've done is negotiate my best price, then tell them I need a couple of days to get the cash, but I would like to put down a downpayment. The first time they said I could pay the downpayment by credit card. I told them I wanted to put a $10K down payment (on a $12K car) and they said no, so I put $2K down. I would try for $5K.

When I bought my Toyota a few years ago, the best I was able to get was I think $2k on a c/c for the deposit. However, I was getting a couple of aftermarket accessories on the car (Lojack system, moonroof airdam), which I was able to specify as being done separately, and thus I was able to charge them (like any other parts/service order). Not the huge amount charged which I would have liked, but every little bit helped.

Jeff

We bought a new car in Nov., 2005. When I told the salesman that I wanted to put the down payment on my CC so I could get FF miles for the purchase, there was no delay on his part saying that we could do that for up to $5,000, which we agreed to do.
Guess it depends on the dealer, and what their limits for CC purchases may be.

bj-21.

I purchased a new vehicle last month and put $3K on the card. Didn't really negotiate - just asked what the max was I could do.

When test driving a Buick that I really liked (for the $100 Marriott gift certificate --see SPAM for details), the dealer told me the max they would put on my credit card was a $2,000 downpayment.

I think the hitch may come as you are trying to charge the "negative equity". I'm trying to think back to my finance days, but that may cause a problem in the paperwork, if nothing else. At any rate, try it... the worse that can happen is they can say "no"!

Bob

For our last two cars, the maximum the dealers around here would put on a credit card was $2000.

Just to add my experience, I've done up to $2500 at a Chrysler dealership in Florida. Dealer didn't bat an eye and took my AMEX.

Given the merchant fee's they have to pay, and reading these forums, I would guess if they are willing to allow anymore than about $2000 you may have paid too much for the car. :(

After the deal was struck, I asked to put the whole car on a credit card. They said no. I asked their maximum, and was told $5000. So $5000 went on the card. They claim the maximum is set for fraud protection, but I suspect it is the 1.66%ish they lose to merchant processing fees on every Visa charge (more for AMEX, etc.).

I got the best deal in the region, but there was still plenty of dealer margin (low supply, high demand), so I can't see them caring too much about the $85 or so.

When I bought a car in Austin, TX a few years ago, one of the Sales consultants mentioned how someone had bought a new car (not used) entirely on his credit card.

As it turns out, there's more discretion in this than you might think. Your run-of-the-mill bank VISA is not nearly as likely to be accepted than someone's Platinum Amex, for example.

[QUOTE=sowalsky]When I bought a car in Austin, TX a few years ago, one of the Sales consultants mentioned how someone had bought a new car (not used) entirely on his credit card.

I bought my last two vehicles entirely on my DL Platinum AmEx card, a 2001 Ford Ranger and a 2003 Buick. Both dealers protested only mildly.

Lex

We bought two last year. Lexus and Toyota dealer both would only take $5000 on the cards. Toyota initially said only $3K but relented at signing.

I bought a used a used Toyota ($8300 including taxes) entirely on my UA card to get the miles. And I still got a good deal.

Actually, there weren't a lot of options. The dealer wanted to close the deal that night. And it was too late (7 p.m.) for me to go to the bank and get cash or a money order.

Of course, it's possible that the dealer may have been willing to knock $100 off the purchase price if I could pay with cash instead. (The dealer asked me in advance how I was going to pay, so that may have played a role in the price negotiations.)

I'm sure someone here has experience in this........

My wife & I are getting a new car over the weekend. Due to a bad situation 2 cars ago, we were "under water" on our car loan about $8,000. OUCH. But, no matter, we have the cash and will pay it off when we trade in the vehicle on Saturday.

A mileage scheme came to mind on this....tell me if you think this would work.

Figures estimated for ease of calculation

Buy the new car.....$17,000 (inc tax & doc fees)
Trade in old...........$7,000
Balance on loan......$15,000
We owe................$8,000 (in negative equity)

So instead of just cutting the dealer a check to release the title from the lienholder, what if I charged that? Would most dealers accept this? Is it something I should even try, or am I an idiot :)

-A

Most of the dealers hesitance to accept more than $5000 has to due with the fees they pay.

More importantly however, dealers absolutely do not ever want to allow an entire car purchase on a CC because you can dispute the charge if you are "dissatisifed with the quality of goods purchased and you have tried in good faith to correct it with the merchant"

Additionally, the credit card issuer does not get Lienholder rights on the title as a conventional lender does, therefore they have no "legal interest" in the purchase if you decide not to pay, youre still able to sell the vehicle and not repay the CC issuer as you would have to do with a bank or Credit union.

( i was a finance manager at a Toyota dealer for many years) :)

My 2 cents

A couple of years ago, I put $10k on a cc. I hadn't even thought of asking about it, but the paperwork guy happened to mention that I could put up to $10k of the price on the card.

(Not such a good business move on the dealer's part, but I'll take it!)

I bought a new base Camry. It was the "ad car" loss leader. Got an excellent deal as MSRP was $18.7K and paid just under $14K after rebate. My old car had 180K miles so I was due for a new car. :)

Put $1800 as down payment. Mgr initially said no. I offered to pay their merchant fees. At the end, they didn't charge me the fees. I did buy one extra which was the alarm/keyless entry they install on all cars on the lot. I "bit" when the alarm/keyless entry price was half of initial asking price & got 4 remotes instead of two. :D

Last time I bought a car (2000, a Honda), I put the whole thing on my Citi AAdvantage, no problem. Later when I went to pick it up the manager seemed pretty unhappy that I had done it, so apparently communication between sales and accounting at the dealership wasn't so good.

It may be that more recently dealers are less likely to do it, because in the 90's I had no questions asked ever on credit card purchases.