Car Buying Tips

Can You Buy a Car with a Credit Card?

By TheCarzingTeam January 12, 2022 | Car Buying Tips

Car Buying Tips

Some car buyers pay for their new purchase with a stash of savings; they purchase the car outright without a loan. Others, though, might not have the savings to pay for the car or might not wish to drain their savings for the purchase. Financing the car might be an affordable and convenient payment option.

What about using a credit card to buy the car? For card holders with an extensive amount of credit available on their card, charging a car purchase could seem like an option. Can you buy a car with a credit card?

According to CreditKarma, some dealerships allow car buyers to charge their car purchase or to charge the down payment. However, other dealerships might not provide this as an option.

Why Car Buyers Might Opt to Swipe the Card

There are a number of reasons why a car buyer might use a credit card to charge their vehicle purchase or even to pay the down payment. For some, the credit via that card might be the only financing they have to pay for the down payment.

Some buyers might simply have no access to savings for a down payment. This means that they have to use some method of payment for the down payment, and the credit card could be the only option.

As for charging the entire vehicle purchase, some buyers might have access to a promotional interest rate on that card that is less than the interest rate they were offered for a loan. However, promotional interest rates might only be offered for a short period. Buyers who use this as a reason to charge the card need to understand the length of that great interest rate.

Other buyers might have the savings set aside to pay for the car in full but decide to charge the purchase to accrue points on their card. This could be tied to a rewards program.

Can You Buy a Car with a Credit Card

The Possible Downsides of Using a Credit Card

Before a buyer charges their purchase, they need to understand the effect this could have on their finances and maybe their credit score, too. How could using a credit card to pay for a vehicle impact a credit score?

A credit score is tied to a number of different factors, including: payment timeliness (are you prompt or late), credit ratio (credit debt owed to available credit), the length of credit history, the amount of new credit and the credit variety (or mix).

The issue that could arise when charging such a large purchase is that the vehicle eats up the credit that is available and racks up more debt. The large purchase that is charged to the card affects the credit ratio.

Making late payments also affects the credit score. If a buyer charges the car, can they afford to make those payments on time? Or will the monthly payment be too much of a burden? 

Promotional interest rates also can be enticing, but, again, these interest rates are typically not long-term. Can the buyer pay off the car purchase before the promotional rate expires and the interest rate jumps? Also, buyers would need to understand how high the interest rate would rise when a promotion expires. Could they afford these new monthly credit card payment obligations?

In addition, buyers who are considering their credit card to purchase a vehicle could potentially max out their credit limit on the card. If the vehicle uses the entire line of credit, the buyer might have no other financial means to cover any emergency costs that could emerge in the future.  

When the Dealership Doesn’t Offer to Swipe

Some dealerships might just say no to charging any part of the vehicle purchase. Buyers might then need to apply for financing at the dealership or via their bank or another financial institution.

Before a buyer visits a dealership to pick out a car and make a purchase, they might research the payment policies of nearby dealerships to find out if any allow for credit card purchases (even for the down payment).

Buyers also can research their car and financing options online instead of making multiple visits to local dealerships. Sites like Carzing also help buyers understand financing options. Knowing these options ahead of time allows buyers to be prepared for that dealership visit.

Can You Buy a Car with a Credit Card

Use Carzing to Find the Best Car and the Best Financing

Buying a car can feel like a process, especially when car buyers are used to only visiting dealerships to make that purchase. Car shoppers could spend hours wandering the lots trying to find the best car and the best deal.

Some dealerships are under more pressure than others. The stress of trying to find the car and perhaps feeling rushed to make a decision can leave some buyers dreading the entire process.

However, Carzing makes it simple to find the best car and the best financing, too. Car shoppers can visit Carzing at any time—day or night. There is no pressure to speed up the search. Buyers can take their time and browse different makes and models.

Carzing’s search query system allows buyers to find the exact car they want and need. Search by make/model, price, body type or just use specific key words.

Once the query pulls up the results, car shoppers can narrow down their options if necessary. Choose from other criteria to the left of the search results to find the vehicle with all the buyer’s desired features.

Omit new or used models. Or select certain equipment, fuel type, drivetrain, etc. Search results also can be sorted by price, mileage, age, distance or just the best match.

When buyers find the perfect car at a price they like, they can use Carzing to get prequalified for financing. No social security number is required!

Buyers should enter any information on a trade-in amount or an outstanding loan amount on the trade-in. Carzing will show all the financing options. Buyers can choose the financing with the terms and monthly payments that work for their financial situation.

Carzing also will show the amount that buyers need for a down payment. This means that there are no surprises. Buyers will know in advance how much they will need to pay as their down payment.

How do dealerships know which financing for which the buyer is prequalified? All the details can be printed from Carzing, and buyers can present the information to a participating dealership.

Carzing helps buyers save time at the dealership and helps buyers better understand their financing options. This can be especially beneficial for buyers who might feel they have few options for purchasing that vehicle.

The dealership visit can be focused on completing the credit application, taking a test drive of the vehicle, and, hopefully, finalizing that deal. With Carzing, car buyers can find out their financing options so that they don’t feel like the credit card is the only answer.

While using a credit card might be an option, many buyers may discover that there are other financing opportunities, and those monthly payments could be much lower than a credit card payment!

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