Purchasing a new motor vehicle with a Credit Card

Mercedes Benz Amex, pays 5x MR, which are worth 2c/MR with the Business platinum (towards airfare), or valued 1.8-1.9c/MR otherwise (but not as straight cashback). BTW, though the 5X MR is intended for purchase of a new Mercedes, you’ll earn it for any purchase that gets coded for the MB dealership. Which means you can get the credit even on used cars (if the dealer has a used car dept) and other brands at a co-branded dealership (though how it gets coded will depend on the specific dealership structure).

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2 cents per MR is stretching it, but definitely worth a solid 5-7% cash back. Nice move.

If you have an Amex business platinum, each MR is worth 2c/MR towards airfare purchase (actually a little more because you earn 5X on the airfare before it is 100% rebated from MR). However, that valuation isn’t available any longer, and expires for existing cardholders in Oct-Dec.

Same data point as others in here. On 3 occasions, dealers around here would not let us charge more than $5k for each purchase, and even then with some negotiating (were going to pay cash the balance but cut us a discount + bump to CC charge from $3k to $5k for using their financing - which we paid off 2 weeks later). To charge more, dealer was looking at taking back some of the discounts which made charging more than $5k on CC, not worth the extra cost.

It’d be legitimate for them to consider the transaction fees as an expense to move the car and offer 2-3% fee over the $5k amount. One caveat of trying to pay fully with CC is that you’ll forgo financing incentives which are sometimes pretty significant. Our dealer gave us respectively $500 and $1k discount for using their financing for $10k+ vs. paying cash. When negotiating use of CC for amounts larger than $5k, those would probably go off the table first. So you’d have to balance the value of the rewards you get with the loss of negotiating of discount for user dealer financing.

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This is a really important fact to consider.

Even If there are not incentives that mandate manufacturer financing I would give them a shot at beating a prevailing rate, even from a big name CU like Penfed. I had a locked 2.49% rate and dealer got me a 2.09 with BofA. Clearly they get something for closing the loan, so they have an incentive to make it work and beat your pre-approved rate.

To me a car loan is pretty much the some cheapest money you’ll ever get and as long as you’re going to buy it might as well finance it and throw the money into some kind of interest bearing account just so you have some liquid funds. A 1.9-2.9 rate (or lower) is not impossible to get, and a 1.5% rate on a [no penalty] CD or a high yield checking account basically gives you access to that cash whenever you need it for around 1% net after taxes on the interest.

In 2012, we were able to charge $3500 on Credit card.

Regarding those financing options, I would say be careful and calculate. We had an option to go for either 0% APR financing vs regular financing. We went with regular and used my credit union.

Reason: 0% APR financing had higher price which had a baked in higher interest. Regular financing gave you a lower price(as some incentives applied). For me the difference in price was higher than the cumulative sum of interest paid for the whole term.

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