Credit card companies take 2%. Dealers are willing to pass along the fee if you want to charge the entire car. The $2-3K limit is to make it easy for a customer to make a down payment. Dealers are willing to lose $400-600 vs losing a potential sale.

Good posting.

A $20K car will cost the dealer $400 at 2% paid to the CC company. That bites significantly into their profit margin. Thus the dealers put limits on what they'll allow to be charged.

The merchant agreement for MC and VISA states that car dealers are not supposed to put limits on how much the buyers can charge. However, pressing the issue won't get you very far because the sales division can live without taking CC payments, unlike restaurants and retail stores whose business increases by taking such payments. If you manage to get MC or VISA to pull their agreement with the sales division because you could't charge the full amount, it's really no huge deal to them. So instead of getting some miles for a smaller charge, you'll get no miles.

Regards,
Chris

Longo Lexus in SoCa (El Monte) allowed $5K on a UA Mileage Plus Visa towards the cash purchase of a 2006 RX 400h (in June of 2005). This was back when the 400h had just come out so demand was huge; we paid exact sticker (many dealers were getting over sticker). I had also put my name on a waitlist in January '05 with a $500 deposit (also on the UAMP Visa). It was better than a poke in the eye with a sharp stick. Great car.

Basically, if you're shopping for rock bottom price, you can't pay with credit. If any dealer is willing to let you charge the full amount of the car to your CC, then you are not getting a good deal and should instead negotiate a lower price of the car. A better price should be worth more than the miles you earn. I'm sure any dealer would gladly allow you to pay with a credit card as long as you pay the 2-3% transaction fee.

Thank you Scruffy (et al via PM) for pointing out the legacy thread on this subject. I'll merge this new inquiry into the original one, to ensure future readers are able to easily find info.

Just to reiterate my earlier post, I was able to charge the WHOLE amount of a Toyota Corolla which I bought for my daughter at Jack Taylor's Toyota in Alexandria, VA last year. I didn't even have to ask, they said I could pay either by check or charge.

I have now purchased 5 cars with my credit card. Simply stated, a dealership can not deny your use of a credit card to purchase your car.

I go in and simply negotiate the price. I tell them they will have their money before I walk out, if we reach a mutually agreeable price. I do not lie, I do not ever mention check or cash or credit card. I just negotiate.

Once the sales price is set, keep in mind that they want you to sign the papers as quickly as possible. They want your signature on a contract.....which they also must sign! Then, they take you to the finance guy. And that's when they say "We do not take credit cards." I tell them that "You must." And they again say "Nope."

I walk out. Plain and simple. They stare, and can't believe I am walking away.

At home, I have a standard letter which I have used each time and fax to the owner. In summary, I remind them that the legal department of VISA International has advised me in writing (copy of VISA letter attached) of the following conditions in the contract which dealership must have signed with your financial institution:
1) Merchants are not permitted to establish a minimum or maximum transaction amount.
2) Merchants are not permitted to pass on the transaction fee to the cardholder.
Simply stated, if dealership accepts a credit card for any type of purchase (such as in their service dept), then they must accept the credit card for all transactions, regardless of the amount.

I suggest that they contact thier financial institution or their legal counsel to determine what the dealership's rights and obligations are.

I always end the letter with "I would appreciate a reply tomorrow morning, so that I can conlcude our transaction and pick up my new car during lunch."

It's never failed. ^

As added protection, I always call the credit card company ahead of time, giving them notice that I am about to make a large purchase, so they won't decline the charge.

Not true, as I'll explain below...

Your strategy works (and it's a good one), but not for the reason you think. The parts & service department is almost always a separate business entity from the sales department, so indeed the sales department can refuse credit cards while the P&S department can continue to accept them. Even a VISA rep said so as referenced by a post on page 1 (post #14) of this now merged thread. Concerns of legal entanglements WRT the CC merchant agreement do not scare the sales department.

THIS is why your strategy has worked 5 for 5 times. You've walked out the door, but left the door ajar to let the dealership mull the decision of eating the CC transaction fee for a sure-fire sale. Profit margins over the invoice price nowadays give way to hidden quota bonuses and customer service score bonuses. A dealership allocates a percentage of sales allowed to be losses knowing they can make it up in the ways I mentioned. Your strategy of giving the dealership a day to allocate that sale to that percentage is excellent. Still, it has nothing to do with them conceding they must accept CC payments.

Regards,
Chris

Were these at 5 different dealerships?

We will agree to disagree.
3 dealerships. It's just that the cars were purchased 4-5 years apart, so different sales staff, and the management team did not remember me!

Your posts above do not seem consistent to me. I would be surprised if any dealer EVER said to MC or VISA "Go ahead and pull my right to take credit cards, it's really no huge deal to me. I am not going to sell this guy a car if he wants to put it all on a card." Nobody who has ever posted on this board has ever had the experience of a dealer who let their agreement be pulled so far as I can tell. That would prevent him from accepting cards for down payments on future car sales as well as for parts and service if they are the same entity, as you seem to concede in your later post. Likewise a dealer is contractually obligated not to charge you the 2% or 3% MC or VISA fee.

As we have said many times, you may not want to make an issue of it and eat into his profit margin. But by signing up for the card and risking interest, annual fees and late fees, you are contractually entitled to certain benefits and if you negotiate your best price, contact VISA or MC if the dealer then refuses, VISA or MC will go to bat for you and get you the car at the agreed upon price and the miles.

Post 14 clearly says the dealer may or may not accept credit cards, but if he does he must accept the card as payment in full. That's all we have been saying for years.

Even if the parts & service dept's are separate from sales, I don't think a sales dept. would risk losing the ability to take credit cards (MC/Visa). In these credit obsessed times too many people use them for down payments, deposits, partial payments etc. (like if they don't have enough cash for the down on their already jacked up dealer financing). They wouldn't be able to do business.

So few car buyers try to put an entire car on their CC. If many did, dealerships would either a) stop accepting credit card payments, b) start building the CC fee into the price or c) manufacturers would start offering a "CC fee holdback" into the invoice price. If they don't do "b" or "c", dealerships won't wait for customers to have the CC merchant agreement pulled...they'll do "a" themselves. However, since so few customers do try to put the entire purchase on their CC, the decision to accept such payment is much more weighted by accepting a sale for a loss and making it up with quota/CSR bonuses rather than the fear of having their merchant agreement pulled. Since so few buyers cut into their profit margins with a complete CC purchase, they'll almost always go along and take the sale. This is why you never hear of a dealer getting their merchant agreement pulled.

If a finance manager gives you the runaround with CC limits and you don't want to play kevinsac's game of leaving the dealership and having them sweat a lost sale, don't break out the "I'll threaten to have your merchant agreement pulled" card. Instead, break out the "I'll nail you on the CSR if we don't close this today" card. Or break out both, but the latter one will get the deal closed much faster than the former.

Regards,
Chris

I have a close friend that worked as a finance manager for a handful of dealerships for well over a decade. He said that accepting partial payments on CCs wasn't about placating the credit-obsessed society, but rather to ensure a sale by someone who forgot their checkbook for the down payment. So many deals go bad when a customer is allowed to leave the dealership to go home and get their checkbook.

Also, if a customer has to put a partial payment on a credit card and is extended for credit, they'll likely need dealer financing from the finance manager. A poor credit report more often than not will show and the finance manger may not be able to offer an affordable loan which means no sale anyway.

Taking CC payments helps the sales department close in certain situations, but is not critical.

Regards,
Chris

It's not a game and it's proven to work. Further, I make sure they do not sweat a lost sale....I make it very clear to them that the sale will be finalized the next day, once the owner or legal counsel call to invite me back in again.

I usually get 30-50,000 points per sale. But best deal was about 3 yrs ago, when United and Jeep partnered. I bought the Cherokee....and then got 70,000 bonus points on top of it! At that time, 100,000 was still an award in F most anywhere on *A! ^