diablo1

Ya, the only reason it would be bad to use credit cards is if you actually can't pay it all off right away. Then you would effectively be paying a very high interest loan for your car, since credit cards have very high rates. But in general, if you can put a lot on a card in a given month, and pay it all off right away, the credit card company will love you. That's what I've done and my credit limit is 8x higher now than when I first got my AmEx two years ago.

All else equal, I think credit cards are better than cash because you get rewards (points, cashback, miles, etc), and if it gets stolen, you aren't liable for anything the thief buys. With cash, you get no rewards, and if it's stolen, you are out of luck.

I wish I could pay my monthly lease with my credit card. Unfortunately not allowed by Lexus Financial, as far as I know.

cmusic

I financed my IS250 through my credit union at work, so my Lexus dealer treated my purchace as a cash only deal. My credit union gave me a lower rate than the Lexus dealer could. The only problem was the dealer took almost three weeks before they faxed in the sales contract to the credit union. The credit union told me to not worry, I was covered on the loan and it just delayed getting the payment to the dealer.

When I started dealing on the car I told the salesman upfront that it was a cash deal. This made the dealing much easier than I have experienced before. I did my homework on the dealer and sticker prices of the car and all option packages, so I knew how much wiggle room I could negotiate around. I ended up getting it for a few thousand dollars under the sticker price. I said I wanted to trade my old car in too and I end up getting the trade-in price I wanted (a few hundred above Blue-Book). But when the sales contract was written up the full retail price of the IS was listed and the sticker price discount I had negotiated was added to my (above Blue-Book) trade-price. Either way I paid the same amount of cash to the dealer but the to the dealer they sold the car for full sticker price. The sales manager said they written the sales contract that way to make the monthy sales report look a little better.

Bichon

You are lucky. Around here, all the dealers use a pricing service known as "Galves", which has much lower values than Kelly Blue Book or Edmunds.

Lexus3oi

i've also considered taking advantage of low "fixed rate" credit card offers...ie. 1.99%

but another negative i've thought about is that if the CC company charges you a min. payment of 4% of your balance each month, the first few payments could be fairly substantial

kensteele

Bad idea.

Johnny Mo

Paying for a car on a credit card is illegal. It bypasses the whole credit approval process, regardless of how quickly you are going to pay it off.

Additionally, do you honestly think the dealership is willing to "throw away" the 1-2% that the credit card company will charge them on your deal...doubt it, but good luck trying to get a dealership to go for it.

ntran18

iTrader: (27)

, when you apply the CC, that is the approval process for the credit line. When they swipe your card that is also an approval for the amount you want to borrow.

They will take your CC if the profit margins make up for the 3-5% in fees. So that should be a hint if they are willing to take your card for full payment.

Gojirra99

Dealerships usually set a maximum amount they can accept as a part of the payment for a car they sell. For example, my Infiniti dealership would only accept $2k as the maximum you can put on your car by CC.

gsrthomas

iTrader: (1)

I'm going to try to put $4000 on my credit card when I purchase my new car. Total I'm going to put down is btw 15-18k. I just want some points on my credit card and gonna pay it off immediately.

kensteele

Exactly exactly exactly what I did right down to the $ amount and rationale and the payoff.

RA010324

Why???? PLEASE go see a financial advisor before you throw that much $$$ in the toilet by putting it down on a car.

kensteele

$4k is not a lot to put down on a $45k car, could say you a lot of interest on a loan.

sajonf

OK smart guy, what's wrong with putting down $4,000 on a car? Fill me in.

Neo

iTrader: (3)

Can you elaborate J? Is there a law against this? This is the first I've heard of this. I will agree that the dealership may not do it but breaking a law? Just curious.

Neo

iTrader: (3)

I think he was referring to the 15k-18k amount which is more substantial than the 4k.

You will have to find an investment that gives you more return than the car loan interest rate. For people with a trusted advisor that can get this (minus all the fees), then it might be worth it. The other issue is that for this $ to earn $, it has to be tied up in the investment. In the mean time, since it is not used as part of the down payment, you have to pay more per month. If you don't have this extra cash (if you are on a budget), then not all of that amount can be in the investment.

Lots of numbers to play with to get the right balance.