Buying a Car On Credit

By on October 19, 2017

Here, of course, is a big ol’ no-no in smart spending: buying a car on credit. Using a credit card to pay for a vehicle: travesty! Well, the CODs did just that last weekend, and lived to tell the tale. Here’s the lowdown on our car-buying shenanigans!

Bidding adieu to our minivan!

Our Old Minivan

Our minivan was with us for two years and two months. It was a purchase necessitated by the awkwardness of loading two children into teeny Pontiac Vibes. In the interest of saving our kids from impending concussions from smacking their heads into the door frames while attempting to maneuver them into carseats, we went bigger. 

I had seen the minivan ad on a friend’s Facebook page, $3500 for a ten-year-old Town and Country. That was a low enough price that we could pay in cash, no prob. It test drove great and we went for it, selling our older Vibe a few weeks later.

That van was a dream, honestly. Old and worn meant we didn’t stress over the constant damage from toddler snacks and packing it full for long road trips. Racks on top were perfect for kayaks. The DVD player inside worked (albeit without a remote) and saved us from many a tantrum en route to Grandma’s and Aunt Teresa’s houses. 

However, our lovely van was nearing a pivotal time in its life: needing more money to keep it running safely than we wanted to spend. New tires were in the plans this fall. One side mirror had been crudely taped on since a wayward kayak knocked it off over the summer. The rusted edges, which had been DIY’d by Mr. COD, were beginning to worsen and even crumble away. 

Plus, it had something weird going on where it stalled within a minute or two of every gas fill-up. You could avoid danger by turning the engine on and off briefly at the gas station, but of course, we didn’t always remember. A few weeks ago, I got a bit freaked by the stalling. Thankfully, we were only in a parking lot, not a busy road, but it scared me, providing another impetus to switch vehicles.

Therefore, the time was right to say goodbye to our van. To make the decision even easier, a family member had recently given us a monetary gift that would cover a big portion of a newer car cost. While we at first intended to save it towards a new roof this year, we chose an upgrade in car instead. 

Our New-to-us Car

Mr. COD did most of the research, browsing used vehicles online for a few weeks. We ranged between around $5-$10K in price, figuring we could pay that up front and it would still be a very reasonable purchase. We hemmed and hawed over how vital it was to have three rows of seating, or whether a minivan was best. Since two kids seems to be where we’re stopping, three rows isn’t a big priority. We really just needed a decent amount of space for everyone, and a crossover seemed a good choice.

Last Thursday, we took the boys along to test-drive a Saturn Vue. It was okay, but felt sort of cheaply made and felt a lot more cramped inside than we wanted to be. Plus, despite low mileage for its age, it had a ton of wear and tear and didn’t appear well cared-for. Its lack of roof racks and crossbars (for kayaks) sealed the deal that it was not for us. 

As we dropped the Vue back at the dealership, I noticed a Nissan Murano with $9K scrawled on the windshield. It was in the same price range and size we’d been searching for, so we took that one for a spin and it was great! The boys helped by testing the power windows and noticing the awesome sunroof (thanks, guys). Mr. COD looked up its ratings that night to be sure it was a safe option.

We didn’t need much time to think it over; by morning we were ready to go buy the new car. To sweeten the deal, Mr. COD found the Nissan listed online for $2K less than it had been at the dealer! I cleaned out the minivan and we met him at work to go to the dealership. 

Credit Card Purchase

Here’s where the credit card comes in. I know, we’d received money to put towards a vehicle, and we certainly could have gone right to the bank for the cash or a check. This is when we got impatient; we had two kids with us and just wanted to be done quickly with the transaction. I hadn’t known if one could even use credit cards to buy vehicles, but apparently, it’s possible. 

Paying by credit card entails an extra fee, and in our case, it was 3%. So for our $7K car, it cost us an extra $210 to put it on plastic. We reasoned that we’d get a third of it back in 1% card rewards, and again, we were impatient. We didn’t know how long it would take our bank to prepare a cashier’s check and dreaded the thought of driving back across town at midday. I know, I know, it’s dumb and I wish we’d just gone back to the bank. Oh well; we still got an upgraded car for a pretty good price!

ALWAYS, ALWAYS, ALWAYS DO THIS WITH CREDIT CARD TRANSACTIONS:

*Don’t worry, folks, we got into that card account immediately the next day and PAID the balance IN FULL! I almost forgot to mention this most important part of using the card; oops! We NEVER would have considered paying via credit card if we hadn’t been able to pay the balance right away. 

Had we realized that another customer had come in, like, two minutes before us and would spend hours haggling over financing, we’d have definitely not used the card. For some reason, the dealership only could handle one person paying at a time? Who knows. It was a bit ridiculous. We waited for two hours to get the paperwork done (even though we’d come in ready to buy instantly). Maybe that was our punishment for paying by credit card…

Driving lessons!

Jr COD on the road!

Silver lining to all the waiting: the dealership provided these fun toys that entertained the boys during our wait. They had a blast and even forgot about lunch, ha! The other customers waiting probably didn’t love the noise, though.

Keeping them away from this brand-new car was fun…

Well, we’re enjoying our new car so far! We know it’s not an unreasonable expense for us, especially considering the added money we’d have had to spend to keep the van going. It’s easy to see how people get pulled into higher car payments than planned, though. Fortunately, we weren’t swayed by Shiny Object Syndrome and ignored the brand-new sparkling vehicles. We’d hoped to stay under $10K and were even more thrilled to get one for under $7K. 

Our new wheels…quite a bit cuter than the old van, if you ask me:)

Perspective changes if you let it. Driving a pretty beat-up old van for a couple of years adjusted my level of vehicle comfort. I didn’t love the looks of my van, it wasn’t a color I’d have chosen, but it filled our needs for awhile. And in turn, our new car won’t be perfect, but it feels pretty dang luxurious to me! It is still really spacious, and a little more my style, but that’s a bonus. I wouldn’t advise the credit card payment option, but it wasn’t the end of the world. Let’s hope our Nissan lasts us a long time (and that we find a way to hook up media devices for the kiddos on long trips). 

Have you ever made a car purchase you regretted? Or helped someone avoid a colossal car mistake?