Should You Charge Your Car?

When you go to the dealer to buy a new car, is it a good idea to charge the purchase on your credit card? Most people would think “No way!” In reality, though, it depends on what kind of credit card you have.

Accruing large amounts of credit card debt is never a good idea, but if you can pay off the car relatively quickly — like before you have to pay interest on the lump sum — then it could be a good opportunity to collect all kinds of credit awards. You might bag enough frequent flier miles to take that Fiji vacation you’ve always dreamed of.

Dealers obviously won’t like that you’re paying with a card and will try to jack up the price to compensate. Remember, they lose a 2% transaction fee, plus miss out on any incentives for arranging the vehicle’s financing through the automaker’s credit arm, which will instead be handled by your credit card company.

It’s best to negotiate the price first, then whip out the credit card. The dealer may balk, but if you have a copy of your cardholder agreement and stay on the offensive, there’s not much to be done. Any business that accepts credit cards doesn’t have a choice about the amount of money that can be charged to it. If the dealer continues to stonewall, simply insist that you will take your complaint to the credit card company and they will have no choice but to back down.

Then all that’s left is to find out when monsoon season is over in Fiji.

New Car? Put It on the Credit Card (The Consumerist)