Use a Credit Card to Buy a Car From a Dealership

Ever since the financial crisis of 2008, credit cards have been looked at as the devil. However, for a chosen few, there may still be some benefits to buying a car with a credit card. If you have the credit available, you are disciplined about making payments over your minimum and your interest rate is lower than what you're being offered by car loan companies, you may want to seriously consider this strategy.

Instructions

1

Call your credit card company to verify your available balance. Once you know how much money you have available on your card, you'll have an idea of the price range of cars you should be looking at and where to go shopping. For example, if you have $10,000 available you might be able to look at new or gently used cars at dealerships. If you only have about $500 available on your credit card, you may have to visit a small car dealership that specializes in used cars that are over 10 years old (be sure to get a CarFax vehicle history report before buying a used car on your credit card--see Resources).

2

Verify your interest rate on purchases, or if you plan on writing a check from your credit card account, see if there are any balance transfer deals that your credit card company is offering. You may be lucky enough to get a temporary 0 percent balance transfer offer so that you will only be paying back the principal for the car purchase for a while. (Determine what the APR will be after the promotional period as well.)

3

Visit the dealership and browse options in your price range. Find the car that you are interested in and discuss the total cost with the salesperson. Determine how much sales tax you are going to have pay for the car in addition to the sales price. If the sales tax and other fees will bring you above your credit card limit, you are going to have to negotiate the price down with your salesman. If you let him know that you are prepared with a certain amount of money on your credit card to pay immediately, and only a matter of a few hundred dollars is standing in your way, he may be more willing to come down on the price.

4

Verify the total amount that is going on your card and make sure that it is less than the available balance on your credit card. Sign the paperwork for the sale and your credit card receipt. The dealer will probably require at least two forms of identification to confirm that you are in fact the credit card owner since this is a very expensive transaction.