01-22-2021, 08:57 PM | #1 |
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US X5 downpayment by credit card?
Hello folks from US. I am planning to put $15,000 down, so this reduce my monthly payment, can I do it with credit card? Did anyone do this at your MBW dealership? I remember, I've read about this on Lexus forum that Lexus dealer did not allow to pay downpayment by credit card.
My credit card has 2% cashback, would be nice to get $300 back, Thanks. |
01-22-2021, 09:13 PM | #2 |
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It would be up to your dealership but unlikely they would take that much on a credit card. My dealer does $2,500.
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01-23-2021, 02:51 AM | #5 |
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Like everyone else is saying, most dealers will limit the amount you can pay by credit card. Every dollar charge can cost the dealer 2-4% so they make less money, which is why they limit the amount. If you really want the points, offer to pay a few percentage points on the down payment amount to cover their cost, but most likely that will not work in your favor. I’ve seen people do this when they are super close to a tier or reward that they need ASAP for a trip or something where they need points but that rarely works to the buyer’s advantage. Usually, at best, you’d just be at break even (pay $300 to get $300 cash back)but if you just need points for something there might be some merit to consider it.
Anyway, my dealer limits $2,500 as well. I didn’t have a check with me since I picked up my car on the way back from a long flight so I had to put more on my card. They weren’t happy but it wasn’t a lot more - just to cover some negative equity on a trade. I don’t think they would have been happy if it was much more. Hope that helps! |
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01-27-2021, 08:51 AM | #6 |
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My previous vehicle purchase, the dealer limited it to $5000. My recent X5, it was $2500.
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02-01-2021, 01:03 PM | #9 |
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02-01-2021, 05:27 PM | #11 |
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The banks charge the vendor a fee to process any CC purchase, so, it's an automatic extra business cost. It's totally up to each individual company how much they're willing to pay for that. That fee can be fairly significant, depending on the agreement they have with their bank, and which card you choose. Those cash back benefits come from somewhere...and, it's the vendor. Any interest they receive from you is a bonus.
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02-01-2021, 07:23 PM | #12 |
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I think mine was just $1000 or something like that lol
But yes, it's a significant cost to them so if they're already cutting it real close to the bone on a deal, they can't afford to allow much on a card. I did pay for my solar on a credit card. That was awesome. I attribute that to Tesla having a totally mismanaged back office tho. |
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02-22-2021, 02:09 PM | #14 |
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Depends on the dealer. Mine allowed me to do $15k on two cards with different amounts on each card and not split 50/50. They won't do all $15k in one card. I was after points/rewards so two cards was fine.
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02-24-2021, 11:11 PM | #15 |
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Just my opinion.... but curious, why would you want to put a down payment on a car?? All my cars are ZERO down , I just roll it all into the payment. Yes, I guess there is that psychological "lower payment", but if you carry a balance on your credit cards, you're gonna be paying a lot more for the down payment you just made to get the payments down to where you want them.
Plus you get crushed if you turn the car in early or forbid an accident should total the car. Then you're out a substantial amount of cash.
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02-25-2021, 12:14 AM | #16 | |
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Your logic about getting crushed and being out a substantial amount of cash is flawed. When you buy new car, it immediately depreciates the minute you drive off the lot. Often if you put nothing down you will be underwater on your loan because of depreciations AND rolling in all the extra cost. Putting money down is having equity in your car in addition to lowering your monthly payment and paying less in interest over the life of the loan. You also avoid financing cost related to the purchase of the car, you are paying interest on the taxes - that's like shooting yourself in the foot. If your car gets totaled then any equity in your car after insurance pays off the loan comes back to you. If you are totaled and have no money down, you may have to pay a substantial amount to pay to close the loan on a totaled car. Insurance pays the value of the car, they don't care about your loan balance or your interest. Putting money down can also secure you a better interest rate on your loan. There are many positives to putting money down when buying a car. If you bought a 2020 G05 M50i in Dec 2020 for $95K, that car is worth about $85-92K by KBB - add in title/tax/registration at 7% of your purchase price and your loan amount balloons to $101,650 that you are financing, you probably would have made 1-2 payments by now on a hypothetical 5 year loan with 1.9% rate at a monthly payment of $1777. $101,650 minus $1777 x 2 = $98,096 remaining on your loan. If your car got total today and insurance gave your $88k as the value, you need to come up with $10k to pay off the loan (that's now having to come up with an unpredicted substantial cash amount). If it didn't get totaled and you kept it for 5 years, you would pay an additional $5k in interest. If you put $10k (a sum know in advance of purchase) down on your car your monthly payment would be $1602 ($175 cheaper) and your loan balance after 2 payments would be ~$88K; if your car was totaled you would owe nothing to close out the loan and can walk away. Its also flawed logic you get crushed if you trade in your car early, any excess equity comes back to you or can be applied to the purchase of a new car. Leasing is a different story, but leasing is a money pit and poor financial strategy.
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02-25-2021, 01:29 AM | #17 | |
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02-25-2021, 06:54 AM | #18 | |
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Just like every other financial decision, no rule of thumb applies. You need to look at the specifics of each situation as well the the person's specifics (risk tolerance, age, assets, future plans, etc.) to determine what would be course of action.
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02-26-2021, 06:58 PM | #20 | |
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WOW... Lesson learned. I know what you mean by the "gap" between the current auto loan amount and the actual value of the car, should an accident total the car. I guess I should have said "make sure you get gap insurance if you put no money down". Luckily, my auto insurance comes with FREE gap insurance (well, nothing is free, but they're not showing a line item cost for it).
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02-26-2021, 08:09 PM | #21 | |
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02-26-2021, 10:51 PM | #22 | |
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