Can You Buy A Car With A Credit Card?
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Cars can be huge purchases. They can be expensive, require a lot of care, and incur ongoing costs that will have you paying money out of your pocket long after you fully own your new ride. Heavy expenses like these are why financing a car can be so tricky; you want to drive away with your fancy new set of wheels right away, but you have to figure out how to pay for it all first.
One often-overlooked method of purchasing a car is by using a credit card, which can seem confusing but actually has some untold benefits if it’s done right. We here at CoPilot have all the information you need about whether you can buy a car with a credit card!
Quick Answer: Yes, You Can Buy a Car with a Credit Card
Yes, it is absolutely possible to purchase your new car with a credit card. The bigger question you have to ask yourself, though, is whether or not that’s actually a good idea. Credit card purchases can represent sizable financial burdens, meaning that you need to have a good grasp of your financial situation before committing to such a huge decision. As long as you can pay off the purchase quickly and are getting a good deal, you’re good to go!
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You won’t realize how outdated other car searching apps are until you try the CoPilot car shopping app. CoPilot does the hard work for you by searching all of the listings in your area and intelligently creating a personalized list of the best buys in the area that match what you’re looking for.
Why Buying a Car with a Credit Card Can Be Beneficial
One of the primary hooks that credit card companies use to get people to sign up for their card is reward programs. These usually see you getting a percentage of the money you spend back and sometimes getting rewards like free nights at a hotel or other luxuries if you spend above a particular amount and pay it all back in a timely manner.
A huge purchase like a car can be an excellent way to quickly get your spending above the required amount, allowing you to reap the benefits and get cash, free accommodations, and potentially more for a purchase you were likely already planning to make. It does mean that you need to have the money available in your finances to account for the purchase, but if so, you’ll now be getting money back that you wouldn’t otherwise.
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What It Takes to Buy a Car with a Credit Card
First and foremost, we have to address how dealerships might react to your desire to purchase a car with a credit card. Credit card transactions can cost dealers major processing fees, sometimes as high as 3%, which makes them more hesitant to allow the purchase in certain situations.
In some cases, they might only let you pay for a portion of the car with your credit card. This means that you’ll either have to pay for the rest with another form of payment or actually split it up between credit cards. If you have multiple lines of credit and can afford to split it up, this can be a wise course of action that lets you reap even more rewards, but we’ll get into that in a bit.
Now that you know you can buy a car with a credit card, let’s dive deeper into what all that entails. Your credit limit will be a major factor in whether it’s a good idea to use a card for this transaction. If it’s relatively low, you should call your bank and see about increasing it so that you can make a larger payment on the car or buy it outright.
You’ll also want to be careful when it comes to how much of your limit you’re already using. This is known as credit utilization, and if it’s too high to begin with before you even make the purchase, you could risk damaging your credit score, which is a no-go.
It’s strongly recommended that you give your credit card issuer a call before you make any huge purchases and inform them of what you’re about to do, just so everyone is on the same page and the transaction doesn’t get held up for any suspected fraud.
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When Is It Not Such a Good Idea to Use a Credit Card?
Even though you can enjoy some great benefits from your credit card company when you buy a car with a credit card, it isn’t always a good idea. As we’ve said above, you really should only use a credit card to buy a car if you have the money on hand to pay for it already.
Many people buy cars on loans, where they pay off their cars monthly with some amount of interest. While this isn’t always ideal, it’s usually done when a person needs help paying for their car, and in many cases, it’s the most reasonable option. Paying for a car with a credit card when you don’t currently have the ability to pay it off is inadvisable and could get you into financial trouble, which is never worth it.
There are certainly more options available for you to make a car purchase. Even though you can buy a car with a credit card, you can leverage your good credit to help you save money on the transaction without actually charging it to credit. You’d want to have a high credit score regardless in order to buy such an expensive item on credit, but you can also use this to get a great deal on an auto loan.
Some dealerships could give you as low as a 0% interest rate if you have great credit, so don’t feel that your opportunity is wasted even if you can’t make the purchase on credit right now. We recommend that you take full inventory of your finances and have a very reasonable estimate of how much the purchase would cost you and how much you can spend.
A great rule of thumb is you know you have enough money to make a huge purchase if you have one and a half times what you think the car will cost you. If you can buy it with a credit card, you can enjoy some great rewards, but if not, why take the risk?
Get a Curated List of the Best Used Cars Near You
The CoPilot car shopping app is the easiest way to buy a car. Tell us what you’re looking for and we’ll search the inventories of every dealership in your area to make you a personalized list of the best car listings in your area.
Only looking for newer models? CoPilot Compare is the search engine for nearly-new cars. Only see cars five years or newer with low mileage — CoPilot Compare is the best way to find off-lease, early trade-in, and CPO cars.
The best part? CoPilot is built using the same technology that dealerships use to buy and sell their inventories, so we have more info on each vehicle than competitors. CoPilot doesn’t work with dealerships, so there are no sponsored posts or other shady practices — just the most info on the best cars. Check out our About Us page to see how CoPilot works.
