I don't believe so.

They didn't -- you got a discount for paying cash; you weren't surcharged for using a credit card.

I know it's a question of semantics, but that's the reason behind that practice not violating the merchant agreement.

And you get up and walk out if you don't like the deal, even after spending hours hammering out what you want. It sucks I know and some dealers base their business on just wearing out customers. I've had dealers agree to something and literally walk back and say we calculated wrong and we need a little more. They were right but I wasn't comfortable with the deal anymore and I just left.

Not directed to you, but just some of the undertones I am reading in the posts. You don't have to call the cc company, the government, the manufacturer, or anything else - just move on. Dealers might suck, but expecting someone else do something is kind of silly. You're the customer.

Plus every vehicle I have ever bought in my life, somewhere early in the whole discussion they asked something along the lines of, "how are you planning to pay for this?"

If you live in a larger city, that's correct. But some of us live in smaller towns, and the alternative dealers for the car we want (especially if it's a nicer import) are a couple hours' drive away, or more. Where I live, if I want a BMW, there's a dealer 5 minutes away...or one 75 minutes away. So contrary to your first paragraph, there might very well be situations in which the customer would (and should) push the issue....

And expecting someone else to do something isn't silly, if they've already agreed to do it.

The one point you've made that I'd agree with is that most dealers seem to ask about method of payment in the conversation. But based on other posts in this thread, that doesn't appear to happen all the time.

Interesting Los Angeles Times (August 21, 2007) article about gas stations cutting back on credit card acceptance in favor of cash.

Start of story:

"Cash rules at some pumps

Credit card companies' fees can be a significant expense for dealers. Some offer markdowns of 3 to 15 cents per gallon.
By Elizabeth Douglass
August 21, 2007
Americans love their credit cards. But at more and more gas stations, it pays to be part of the cash crowd.

In Costa Mesa, Craig Hummel pocketed a 12-cent-a-gallon discount recently because he used real money at a Valero station instead of his Visa or MasterCard. He bought 9 1/2 gallons of premium for his Mercedes sport utility vehicle and saved $1.14.

"I know a lot of people just go wherever they want for gas . . . but I only come here," said Hummel, a Realtor from Newport Beach. "Over a year's time, you save quite a bit. I think more stations should offer it."

They are. To dodge the rising fees that credit card companies tack on to transactions, both no-name and big-brand stations are charging drivers less when they buy with cash. In California, the savings range from 3 cents to 15 cents a gallon."

Read the rest at:

http://www.latimes.com/business/la-f...,6090239.story

You can also take a look at the Chicago Sun Times consumer writer's take on minimums from August 11, 2007 at: http://www.suburbanchicagonews.com/n...XER_S1.article

MasterCard makes its 270-page "Merchant Rules" available in PDF for public download at this page. Section 9.12.3 on page 2-22 reads in full "A merchant must not require, or post signs indicating that it requires, a minimum or maximum transaction amount to accept a valid MasterCard card."

They also have this page to report merchants who violate it. The first check box for describing the type of violation is "In order to make a MasterCard purchase, the merchant/retailer required a minimum or maximum amount."

I haven't checked other credit card associations or issuers, but I suspect others have similar information available.

They do. All 5 major CC issuers have links to their full merchant agreements somewhere on their sites.

Amex:
https://www152.americanexpress.com/E...ernet&origin=6

MC: http://www.mastercard.com/us/persona...iolations.html

Go to the sites for Visa, Diners and Discover for the others and you'll find them.

BTW, it was mentioned by a newbie in this thread that car dealers most likely are using they're non-exceptance of CCs for full payment of the vehicle as a negoitiation tactic, and nothing more. That is not true. Many genuinely don't want to except the CC simply because they will lose money processing the payment.

The newbie (Robin something, I believe), also suggested that CC companies really wont do anything when it actually comes down to the situation between the merchant and the CC company. That it also simply not true. The links above, as well as many people's personal experience (including my own) attest to the fact that CC companies stand by their merchant agreements quite vigorously.

Point, in fact, I pressed a dealer recently to accept my Amex for full purchase price for my SUV ($45,000 full), and they refused. They do accept Amex for servicing, but not for sales. I called Amex on the spot and handed the phone to the sales rep who disappeared. He came back and said his finance manager wouldn't accept talking to Amex over my cell phone. I told this to the Amex CSR and they called him directly while I was still there. I waited an hour, and then he came out and extremely reluctantly accepted my Amex for full payment. You see, Robin, Amex threatened to pull their contract with the dealer for merchant agreement violation, because they DO NOT have any legal standing to refuse payment for one purchase and choose to accept it for another - nor do they have the right limit the amount of payment on the accepted method of payment. And the dealer does not want to lose the ability to accept Amex for all of the charges it takes.

So it is not a fallacy, the merchant agreements exist for our benefit as well. In the end, you will find some dealers will not care and will stand by their own policy, but that is when you file a complaint through one of the links above and follow up with YOUR CC company. Nearly every time I have done this, the merchant backs down.

My parents put an '05 Accord on their AS Platinum Visa...got 23,000 Mileage Plan miles and I don't think they had to pay anything extra. (though I could be wrong).

Interesting...I know a lot of businesses around here, especially small local ones like in a mall food court, won't accept credit cards for purchases under a certain amount (usually $8 or $10).

From reading this thread, it seems clear that dealerships cannot set a minimum or maximum payment amount for using AMEX (for example). Also, it's clear that if a dealership accepts the card in their service department, then they need to accept it in sales as well.

But what still isn't clear to me is whether a dealer can tack on an additional x% "processing fee" to cover what they'd pay to the card company for the transaction. Or, if they don't push it as a fee for using a credit card, it would be a "discount" for paying in cash. Could someone please clarify this? TIA. The prospect of 22k Starwood points is pretty intriguing... :)

I've never had a problem with CCs at the car dealer. Twice in the last year, I have maxed out cards putting money down just for the miles. The response was generally a scoff due to potential interest but never an outright refusal...they were $7,500 and $10,000 charges.

This is because there is a per transaction charge as well as a percentage bite on the transaction. Before you push too hard on this keep in mind that the small guys often just don't have the margin to eat the credit card charges on small transactions. My local newstand went out of business not so long ago, in part, because of credit card issues.

The card companies are an oligopoly (from which some, e.g., FTers profit). They maintain very high charges from the lack of competition in the market, competition which they restrict. The small merchants are getting hit hard by this.

Well I had no problem with my Amex, but I know they violated the rules
1. There was a min/max amount
and 2. there was a service fee.
But out of it, I got enough miles for a RT upgrade.

I do not believe this. Although it wasn't a dealership, I had experience with a business that wanted to charge a "convenience fee" to use a CC. I called VISA and told them about it and they said that business was out of line and they'd fix it. A couple days later when we went back to the business we were told that there had been a change of policy and they were no longer charging the convenience fee.

It is probably true that if the CC company does refuse to act, you would have no suit against the dealer, but probably would against the CC company. More importantly, if the CC company does not honor its contract with its members it will not stay in that competitive business for long. You pay an annual fee and risk interest and late fees, and in return should expect the CC company to keep its word. And no way would a dealer want to be told by VISA you have violated our terms of service, your right to accept VISA is revoked. For those reasons I think this talk about suits and who is a third-party beneficiary is all academic. The CC company would act, and the dealer would have to give you the negotiated price, and accept payment of the whole thing with VISA.

They are indeed in technical violation. Few people will report them, partly because the amounts involved are so small and partly because they tend to be owned by small businesspeople trying to make ends meet, support their families and provide jobs for a few more folks, while probably working a lot harder than most FTers. I tend to cut outfits like that a lot of slack, where I might feel differently about a larger organization.

I've bought motorcycles on charge cards--people do it all the time, since finance rates on motorcycle purchases are stupid high (like 16%). The general problem is that most cards have single purchase limits (typically $5k in my experience), so you'll initially get rejected and have to run it through twice or more to get the full amount, IF they allow it at all. Expect a call from your credit card security department. As mentioned, they always make you pay the extra 2.5% that they get charged for the transaction on the card. I'm too lazy to do the calculations, but I'd guess it'd be cheaper and easier to just buy the darn miles, heh.

Just bought a used Lexus 2 months ago.. paid $2000 on C.C. off total purchase price of $22,000, rest through financing… dealer did not state a maximum limit on c.c..

I now regret not attempting to put a larger deposit on my Amex when I bought my new car. Wonder whether there would have been any problems. This is in Australia though.

Costco doens't sell cars. They have a program where you can buy cars through the group buying department of dealers. Just think if you could stack a credit card bonus and the 2% (max $1000 a year) Costco Exec membership. :)

IMHO, you might have a good case against dealer, credit card issuer and Visa/MC/Amex. But, keep in mind that taking the card might cost the dealer 2% or so. Eventually, that cost, if lots of folks do it, will migrate to the selling price of the cars. Of course, most folks don't read FT. ;)

Bought a Honda Pilot last night, dealer stated "You can put up to $3000 on credit card", I didn't push it as I had other issues of negotiation I cared about more.

casey

in the past yr or so we purchased 2 new toyotas from different dealers...each toyota dlr put the entire car on amer exp..,.they werent happy, but they did it

Did you know that with some loan companies, VWcredit for example, you can make your loan payments online by credit card. Then you dont have the hassle.

No, but you have a loan ;)



*tisk tisk*

Still... lots of people get car loans. I had no idea some allowed credit card payments. I'm on my way to VW now. :-)

Besides, maybe you can get the loan and pay it off immediately by credit card. Usually there's no pre-payment penalty.

Bought a Subaru Outback and the sales rep said we could put $5k on the Visa. When we went to pay, the finance dept. said $6K. So got some Marriott points. Nissan was not so generous and only allowed $1,500.

I hadn't thought of this. I am getting a new car this month and we always just pay cash. I think we will just put it on AMEX this time and pay it off when the bill comes and get the miles. Hope it works! Thanks for the tip!

You can buy a lot of used cars and motorycles on your card via PayPal...I have cranked a lot of points that way!

I just checked this for Audi Financial Services, which is part of VW Credit. There was no option for credit card payments, only ACH debit.

Its been a few yrs. since I have been on the receiving end of credit card transaction but I can tell you this. The percentage rate for credit card transactions that a business is charged by a credit card company is directly proportional to the amount of transactions and the dollar amount they do per month. The highest rate I remember seeing was just under 2% fee per transaction and it went substantially lower than that for more volume and $ amount. From what I seem to remember, a car dealership with a maintenance dept. (read more $) should only be paying somewhere between 0.5% - 0.25%. So if they are crying 3% transaction fee on you, they are purely padding their profit.

I suspect your info on merchant fees is a little out of date. :)

With that said, it would not be correct, IMHO, to accept that it was around 3%. Maybe 1.2%. I doubt very much that a .25% rate is available to any merchant.

I purchased an $80K "slighly used" sports car last summer on my AMEX Platinum Card. I worked down the dealer $5K below market value (from $85K) first, then after that agreement was reached, asked him to put it on my AMEX. He didn't take AMEX, so I offered to pay him $1K to make the transaction happen. As he worked in a small city, he called around to the other dealerships and was able to convince the sales manager at the BMW dealership to do the transaction. The BMW dealer told me it would cost them @$2500 in charges from AMEX, and I agreed to reimburse them that amount. My dealer then agreed to compensate the BMW dealer $500 (out of his $1000) for their time. Once the transaction went through, the BMW dealer wrote a check to my dealer for $80K to close the loop.

AMEX was a little bit difficult to work with. It turns out that one's "limit" is set by taking an average of the previous 6 months balances. To accomodate this transaction, I needed to "prepay" the $80K to AMEX via a wire transfer. Once it was recieved, my transaction could be processed.

In short, I negotiated this transaction for three reasons:

1) 80,000 points through AMEX Memberships Rewards. Note: 100,000 points can be used for a roundtrip Upper Class ticket on Virgin Atlantic from the US (West Coast) to London. That is worth $8,500 at full fare, and my family tries to take advantage of this "freebie" once per year.

2) I saved $1,500 under fair market value for the sports car despite the extra "costs"

3) This transaction helped me reach the $250K minimum on my Platinum card to earn a Black card. This reason alone made it worth it as I can now check that off my life "to do" list... (And for those who do not see the value in the black card, the concierge service is worth it alone. I had a client meeting on Valentine's Day, and all of the choice restaurants were full. My concierge got me a reservation at a very exclusive location - with just two hours notice).

Good luck with the car purchase!

-H ;)

Indeed, but VS award availability is not comparable to full fare because it is capacity controlled. I think Z-class advance purchase fares are a more reasonable comparison, and those are typically around $4,600 (of which a substantial portion is taxes, fees and fuel surcharge which also must be paid on award redemptions.)

I own a business, and the rate I pay to accept credit cards is determine buy the Merchant Processor, Type of card, and My average transaction amount. Here is a website to give you a idea what rates are.
http://www.infomerchant.net/creditca...rocessors.html
Also I have a merchant agreement with Visa/Mastercard/Amex and Discover and I CANNOT discriminate against a customer on what type of card they want to use or how much money they want to charge.
And i'ts not in the dealerships best interest to allow you to use your credit card to pay off the entire car purchase and let me tell you why!
Example: You negotiate a really good deal, dealership runs your credit score and it's fantastic 750 +, they are willing to sell the car to you below sticker, WHY?, because they are hoping to finance you car! When they finance your car they make additional money, they have prenegotiated interest rates with finance companies such as Citibank, BofA, Chase, Etc.
The dealership buys the interest rate at say 5.4% and sells it to you for 5.9% netting them .5% on the total transaction up front, and If you payoff the loan within the first or second payment the dealership will have to refund the .5% back to the loan company. So why would they just let you pay for the car with a credit card, it isn't in there best interest. Although technically, if you push the issue about taking the credit card they really don't have a choice!:D

While it is undeniably true that dealerships like to make money by financing cars, the fact remains that dealers who reject credit cards invariably accept certified checks. Financing arrangements are not part of that equation. Even if someone with a credit limit high enough to charge a BMW doesn't have that much ready cash, that sort of person typically has access to better financing than the dealership offers and the knowledge to use it.

Uh huh. Might help to read the rest of the thread you post on.;)

Bought a Nissan the last day of July. My dealer took $5,500 on a CC and I paid the rest by personal check. (first time I every bought a car without a loan and it felt good)

No problem. Called Visa and told them I was going to make a large purchase and from whom. Armed with a letter from the legal department at Visa I bought a Jeep Grand Cherokee without any problem. Put the whole amount on my Visa. Accountant at the car dealership was having a problem but i showed the owner the letter from Visa and he gave the approval.

Do your homework first and you shouldnt have an issue:)

A few months ago I purchased a Certified Pre-Owned BMW for my wife. When I asked the salesman about using a credit card, he had to call the sales manager over. The sales manager told me that the back office would only allow $2500 on a credit card. After a little more discussion, I was able to get him to sign off on using my Skymiles AMEX for $7500. This was enough to get me to the next 10000 Medallion qualifying mile threshhold. ;)

Was able to put $5,000 on a CC when I purchased a Honda. That was the maximum amount they would take.