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      01-22-2021, 08:57 PM   #1
ksavostin
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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.
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      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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      01-22-2021, 09:19 PM   #3
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My dealer only allowed $5k DP on CC.
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      01-23-2021, 12:46 AM   #4
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Up to individual dealers, most I've ever seen or done was $5000. I too was interested in the cash back instead of writing a check.
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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 $2500.
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      01-31-2021, 10:02 PM   #7
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my was CAN$ 2500.
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      02-01-2021, 08:08 AM   #8
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I paid my MSDs and drives offs w/ a CC - just under $7.5k.
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      02-01-2021, 01:03 PM   #9
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Quote:
Originally Posted by DBLDNon11 View Post
I paid my MSDs and drives offs w/ a CC - just under $7.5k.
I was hoping to put my MSDs on a CC but before I even asked my CA told me they couldn’t do them on a CC.
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      02-01-2021, 04:30 PM   #10
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I was able to do 3.5k only at my dealer
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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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      02-05-2021, 08:07 PM   #13
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My dealer took 5k total. 1k was a deposit for a new factory build and they took 4k more today at closing.
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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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Quote:
Originally Posted by roughyear View Post
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.
Not really, many people just pay off the credit card and don't carry the balance. Most people are interested in the points when charging to a card, so that's the benefit. If it wasn't for points then it makes no sense to charge a down payment to a card.

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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Quote:
Originally Posted by roughyear View Post
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.
I will pay off my credit card immediately. The benefit to me is that I can get 2% back of $15-20k downpayment if a dealer allows me to put so much using a credit card. $400 it is almost the half of the price of a ceramic coating, I think it is sweet deal..
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      02-25-2021, 06:54 AM   #18
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Quote:
Originally Posted by roughyear View Post
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.
In addition what was pointed out above, you also need to consider what gets you the best return on your money. Depending on where you have your assets invested and in what, market conditions, interest rates, etc., it may be less expensive for you to make a large down payment or even just purchase it outright.

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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      02-25-2021, 08:08 AM   #19
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I charged $7500 in drives offs/MSDs for my X5 in November. No issue for the dealer.
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      02-26-2021, 06:58 PM   #20
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Quote:
Originally Posted by gqgambler View Post
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.



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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Quote:
Originally Posted by roughyear View Post
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.
Who said about carrying a balance on the card? I payoff my cards including the $14k I charged two weeks ago. I want the points so I charged as much as I could. I put a down payment because I financed the car. If it was a lease, I won’t be putting any money down and BMW leases usually have GAP insurance included.
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      02-26-2021, 10:51 PM   #22
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Quote:
Originally Posted by roughyear View Post
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).
Very true, I've financed with free gap insurance as well; its a nice security blanket. Your insurance company can offer it with your policy or if you finance with them. However insurance companies usually don't have the lowest interest rates, so you could be paying more to finance the amount. You're paying for gap insurance one way or the other even if its "free"; it can be baked into your insurance premium or by the aforementioned higher interest rates. If not free, you can pay for it monthly or for a one time fee that covers the life of the loan. Worst of all you're paying for it on the finance end, paying interest in all that financed amount over the life of the loan. Of course the lower the interest rate, the less those cost are. Gap insurance is offered because its a money winner, more people pay for it than actually need to use it so they keep pushing it as an option, plus they win on the finance end with you financing more. If they lost money they wouldn't offer it or they would raise the cost of it.
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