I have about 12,000 in cash saved up for purchasing a toyota 4runner. I have a vehicle in mind for 22,450 that is as good of a deal as I can possibly find after looking for months off and on. AS far as criteria, It is everything we want in every way. Unfortunately for my leverage, this is a dream scenario as far as how nice the vehicle is and how well taken care of it is. The miles are lower than I could have hoped for as well. I've looked around patiently even after landing on this just to see if there is better value if I went up in price and can safely say that even if I purchase a 27 thousand dollar 4 runner the value is just not as good as this car.

I pretty much refuse to get a loan so I've asked the dealer to let me buy the vehicle outright with the remaining 10,000 to be paid by credit card which is way more than they currently accept.

Last year when purchasing my highlander a different dealer accepted 5700 with a credit card , after 5000 in cash, and they had a sign up that read 2000 credit card max, but ended up just charging me 200 dollars.

I have enough with credit and cash to buy it at the sticker price but it feels like instead of working on a price and trying to get me into the car now everything is all centered around the credit card purchase and the fact that they only accept 3500 max in credit. They have not confirmed how much credit theyll accept as of now but i have purchased a 500 dollar down payment "holding" cost so no one else can buy it. By my math Its going to end up costing 23,450. Its like I'm already hoping for a favor and I feel like I've lost all leverage when the fact is I still am walking in there with 12000 and in combo with the credit 22,450, the sticker price. I feel like I should have some leverage. I'm wondering if i'm already asking for so much that they're going to lay it on me with dealer fees and credit card fees and taxes to the point that its not very advatagous to buy it outright anyway. And am I asking for too much of a favor? How is it that with 12000 down Im still paying all the premiums to get into this car. Also, Im hoping I'll have another 4900 by the end of the week which should ease up my requests. That's another element to this that could really shake things up...Any thoughts, please let me know.

  • 5
    Is there a reason you want to avoid an auto loan and want to use a credit card instead?
    – xirt
    Jul 13, 2019 at 15:20
  • If your question is whether you're asking too much of the dealer, I don't think we can definitively answer that.
    – Lawrence
    Jul 13, 2019 at 15:40
  • You have ultimate leverage, you can walk away. Credit card processing fees cut into their profit, the larger the portion you pay on credit card the worse it is for them. If the vehicle is such a good value, then they likely won't compromise much on price. Paying on credit card makes little sense.
    – Hart CO
    Jul 13, 2019 at 15:53
  • You cannot afford this car, so move on with your life. its weird that you don't want a car loan but are okay with credit card debt. The later is worse IMO. So either buy something cheaper, or continue to drive what you are currently driving. Then save more money so you can afford the car when a similar deal comes along.
    – Pete B.
    Jul 15, 2019 at 12:14

2 Answers 2


You've got two contradictory points:

I pretty much refuse to get a loan


I've asked the dealer to let me [...] pay by credit card

Paying by credit card is getting a loan, and this loan will have a much higher interest rate than any auto loan from a bank or credit union. You may also incur additional charges from the dealership since they would then have to pay to process the credit card transaction (whether they pass this on to you explicitly as a credit card fee, or just demand a higher price for the vehicle if you pay by card, you'll pay for it).

You best bet is to go to your bank or credit union (or shop around with a couple different institutions) to get a loan. Avoid financing through the dealership, since this is generally a worse deal for you (and better for the dealership). The interest rate will be much lower than if you borrowed via credit card, and you have some options in terms of how long you have to pay off the loan (although a longer term shouldn't prevent you from paying it off early to save even more on interest).

As far as the price - since the dealership has hangups about you paying by card, it may be worth asking if they'll take less (maybe 20k or 21k?) if you pay cash (i.e. your bank provides the loan, and you walk in with a check to the dealership for the purchase). However, since you've already paid a holding fee, they may be unwilling to negotiate on price (did you sign anything locking in the price when you paid this fee?). They've got that $500 whether you buy the car or not, so they may just hold out on price and hope to sell to someone else for that much after the hold expires if you don't buy it.

  • 1
    Almost a up-votable answer. Getting a loan is not "the best bet". Passing on this deal, until he can afford to pay cash, is the best bet.
    – Pete B.
    Jul 15, 2019 at 12:15
  • 1
    Disagree so much with the never any debt thing.... I'd throw a loan on my car right now and just stick the money into an index fund to make more money....
    – xyious
    Jul 15, 2019 at 18:30

When borrowing money, interest rates are important.

Typically credit cards have the highest interest rates (sometimes upwards of 20%). This means that if you borrowed $10,000 and paid it off after one year, you would be paying over $12,000 for the $10,000 you borrowed (it gets a little bit more complicated than that, but you get the idea).

The reason that they are so high is because the debt is unsecured. If you went bankrupt, they don't have an asset they can seize (the vehicle) to recover their debt.

Auto loans, as much as we all hate having them, usually offer much better rates (some as low as 2%) which means that if you borrowed $10,000 and paid it off after one year, you would be paying $10,200 for the $10,00 you borrowed (again a little more complicated, but it shows the comparison).

The reason the dealer may be struggling to put it through by credit card.

The reason the rates are so low in comparison is because the debt is secured. The loan company puts a lien on the title of the vehicle so that if you don't pay, they just come along with a tow truck and take the vehicle, sell it (to cover their money owed) and send you a check for what is left over. They are more likely to see their money again if you run into trouble financially.

I would suggest not using the credit card at all if possible (or if you do, only put an amount on it that you can pay back in full when the next statement comes). Get an auto loan for the rest, but it doesn't have to be from the dealer. Shop around. Find a credit union with a low rate.

If you already have put money on your card(s), you may still be able to take a loan out against your vehicle, and use that money to pay off your credit cards.

  • To distill the answer: credit cards are hair on fire expensive, while auto loans are everything from dirt cheap to mildly expensive. Thus, an auto loan is what you should want.
    – RonJohn
    Jul 13, 2019 at 15:32
  • @RonJohn: Well, strictly speaking, what the OP should want is a vehicle that costs less than the $12K he has in cash. But there are proverbs about that :-)
    – jamesqf
    Jul 13, 2019 at 17:18
  • 1
    @jamesqf I completely disagree with the prevailing only buy used cars wisdom. If you've got a good e-fund and steady job, then I think reasonable (i.e., don't take your budget to the precipice of affordability) vehicle loans are perfectly acceptable.
    – RonJohn
    Jul 13, 2019 at 20:11
  • @RonJohn: It's not a matter of used vs new here (at least if I understood the OP correctly): it's a matter of going into debt to buy expensive used vs spending the cash you have on a cheaper but functionally identical used. After all, Toyota has been making 4Runners for decades without a whole lot of change.
    – jamesqf
    Jul 14, 2019 at 16:39
  • 1
    @jamesqf I should have written "I completely disagree with the prevailing only pay cash for used cars and never buy new* wisdom.
    – RonJohn
    Jul 14, 2019 at 20:34

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