Also see: 

• Come in Houston, er, Dallas: Buying a House and a Move Toward FIRE
• In Closing: My Experience Buying a House

I’m targeting late April/early May to be out of NYC and in Dallas full-time.

For as long as I can remember, I’ve wanted a silver Subaru Forester. Buying a house and moving to Dallas meant I’d need to buy a car sooner or later.

The budget I had in mind was $6,000 for everything. Tax, title, registration, base price of the vehicle, everything.

I knew car prices tend to rise as it gets warmer, so when I found a great deal on the car I wanted in late February, I went ahead and snagged it.

Oh! And I wanted to pay for it in full. No financing.

Just an in-shape, reliable used car whose only expenses were maintenance, insurance, and gas. Boom.

Buying a car with credit cards

The purchase price was $4,500.

While scanning the ad, I noticed a small but important detail.

So I called to verify and they said yup, but only Visas or MasterCards. So that meant no meeting the minimum spending requirements on a new SPG small biz AMEX.

But here’s what I came up with.

I just got a new Bank of America Alaska Airlines Visa with a $100 statement credit for spending $1,000 within the 1st 90 days.

So I’d put $1,000 on it to give myself a $100 discount on a new car.

That left $3,500 to go. I contemplated opening a new card to earn some extra miles. But then I thought of an opportunity to downgrade a card.

Remember how I said to DTMFA with regard to the Barclaycard Arrival Plus card?

Well, my $89 is due in May and I’m going to downgrade the hell out of that useless card!

I had 2,206 Arrival miles. But need 10,000 Arrival miles to offset a $100+ travel purchase.

So I needed 7,794 Arrival miles. And charging $3,500 would net me 7,000. That was perfect. And didn’t account for inevitable documentation fees.

I went with that one. In the end, I earned 7,672 Arrival miles for an out-the-door price of $4,836. And now I can get $100 toward a flight, subway pass, train ticket…

In all, this would give me a $200 discount. Plus, I had them knock another $100 off the purchase price when I got to the dealership.

It was already priced well below its full retail value. And thanks to credit cards + negotiation, I got a 6% discount on the total price.

Not a bad deal at all.

Other benefits of purchasing a car this way

The more I thought about it, the more benefits I saw to charging the car instead of using debit, or withdrawing cash.

No, there wouldn’t be a warranty or purchase protection (vehicles are restricted from those coverages), but there would be other fringe benefits, like:

• Floating the cost for a few weeks until I could pay the cards off in full
• Showing the banks I’m responsible with my cards, and pay them off in time
• The bonus Alaska Airlines miles

They also helped in the negotiation. Because they put me in the position to offer full payment up-front. Which led to a lower purchase price.

Not to mention the thousands of dollars saved by not financing the vehicle!

Other reasons you might want to use a credit card for a vehicle purchase, or any other large purchase like this:

• Meet a spending threshold for elite status, bonus miles, EQMs/MQMs, stay credits, companion ticket, etc. etc.
• Meet minimum spending requirements on 1 or more cards
• Ease cash flow
• Build a positive relationship with the bank
• More accurate proof of payment than cash for your records, just in case

And again, the bargaining proposition gets a lot better when you can offer a larger amount up front.

Bottom line

This is obvi very niche, but I feel this story expresses some of my other tenets very well:

• Never, ever buy a new car. Always buy used. Pay in full. And take care of it until the wheels fall off.
• Negotiate everything. They said their prices were firm. But I’m firm, too. Ask for the best deal.
• Credit cards do have an important place in personal finance. This is an example of when they take center stage. It’s not always all about points and miles, although I did earn a nice chunk of both.
• Set goals. My god, set goals. Goal-setting is so powerful.

I wanted to spend $6,000 or less for a silver Subaru Forester, including tax, title, base vehicle cost, and registration.

With everything added up, I came to within ~$40 of that amount. The best way to set a goal is to make it as specific as possible. Mine was specific in every detail, including color, make, model, and total price. And it materialized in the exact way I envisioned.

Envisioning is a powerful way to draw your goals to you faster.

And of course, maximize every purchase. :p

So now that it’s all laid out, how’d I do? What would you have done differently?

Would you considering purchasing an automobile with credit cards? 

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