HomeCarsWe bought a car...kind of.

We bought a car…kind of.

As you all know, Girl Ninja and I have been hunting for a used Pilot, Highlander, or MDX for the last two weeks pretty intensely. We were hoping to find a sweet ride on Craigslist since we know that is where both the seller and buyer can get the most bang for their buck. Unfortunately, CL inventory on specific models of cars, within specific price points, with specific parameters on miles and years, is pretty limited. We’ve only gone out and test drove one vehicle from CL and we weren’t impressed.

My daily routine hunting for cars looks like this. Check Craigslist. Check the local car dealerships used inventory. And check a few Auto Brokers websites. Yesterday, we finally found a car that we felt like was priced fairly. Well, sort of.

The local Honda dealership has a 2006 Honda Pilot EXL with 69,000 miles priced at $20,000. I ran the Blue Book retail value on the car with the specs/upgrades the dealership listed and was given a $20,200 value. Some people are stupid and would think the dealership is offering a great deal since it is $200 less than blue book retail value. That couldn’t be further from the truth.

I ran the “trade in value” on the Pilot and saw that one should expect to receive about $15,500 for it from a dealership. That is the price I am assuming the dealership paid for the vehicle. So although their “below blue book” ad might trick some, we all know a $20,000 sale price brings them a healthy profit.

I told them, on the phone, I wanted the car for $18,000. After about 20 minutes, they called me back and said $18,500, but if I came on the lot the manager might be able to go lower. The price drop was close enough to humor me, so after work Girl Ninja and I headed to the dealership, checked out the car, gave it a test drove, and decided we liked it.

After a solid hour of back and forth negotiating the sales rep and his manager only came down $250 more dollars to a sale price of $18,250. Knowing they paid $15,500 for it, and that its private party value is $17,800, I really wanted to get it for $18,000. Not because that would have been a GREAT deal, but it would have been a FAIR deal, for both me and the dealer.

Unfortunately, they didn’t budge. Girl Ninja and I walked out of the dealership hoping they would pull us back in and accept our $18,000 offer. No such luck, they let us walk out.

After talking things over and doing some more research tonight, GN and I decided we are willing to pay $18,250 for it, but not without one last attempt to negotiate the price.

Here is my plan this morning.

I will go in to the dealership and accept their $18,250 sale price. As they are drafting up the contract and paperwork, they will inevitably ask me how I will be paying for the vehicle. That’s when I will whip out my secret weapon…my credit card.

The look on their face when I do this will be priceless as this will definitely be their least preferred payment method. Visa will charge the dealership a 2%-3% merchant fee on the transaction, costing the dealership at least $360. They will likely tell me that there is either a limit to the amount I can charge to the card (like $2,000),that they wont allow me to use the card at all, or that they will charge me a 2% fee for using the card.

That’s when I will whip out the VISA merchant agreement that says a merchant must….

Accept all types of valid Visa cards . Although Visa card acceptance rules may vary based on country specific requirements or local regulations, to offer the broadest possible range of payment options to cardholder customers, most merchants choose to accept all categories of Visa debit, credit, and prepaid cards .* (this dealership has VISA listed as a method of payment option).

Always treat Visa transactions like any other transaction . You must not impose any surcharge** on a Visa transaction

The threat of reporting them to VISA for violating their merchant agreement will prevent them from charging me more for using my card. I will then re-offer my original deal saying, “Look instead of taking my card and paying a $360 merchant fee, drop the price another $250 and let me pay cash so we can be done with this deal.” In a perfect world, they accept my cash offer. The next best scenario is they allow me to just use my CC for the purchase, thus earning me a crapload of frequent flier miles.

The worst case scenario, and the one that will likely transpire, is they say no to the deal. Since paperwork is not typically signed until payment method is discussed, they could just scrap the whole deal and refuse to sell me the car at the negotiated price. If this happens, they will get their $18,250 cash price as we still think the car is worth it. I wouldn’t be a personal finance ninja though if I didn’t pull out every last trick in an attempt to get the best deal possible, right? Wish me luck!

-Ninja out!



  1. Wish you well – you may be surprised. Worse thing is that they say no.

    When we were car hunting we went to the dealership and was amazed at how the price can fluctuate so much. We were bought in the showroom with an encouraging internet price. After haggling we couldn’t come to an agreement. they still wanted to stay and talk numbers we gave ours and then we told we had to leave.

    About two weeks later a car pops up on Craigslist that suited us just fine, so you never know where you’ll get your car. Best wishes on the car hunt!

  2. I hope that credit card deal works for you. I wanted to put a good portion of my car on my credit card when I bought it a month ago and they told me they could only accept it for charges over the price of the car (taxes, tags, title, etc) so I was only able to charge about $2,500 on my credit card. Not sure if that was a “local regulation” or if that was because I had to finance a small portion of the car so they were unable to do it.

    Can’t wait to hear what the dealership says!

  3. Huh. We weren’t able to buy ours on Visa. We wanted to, but apparently there are all sorts of anti-fraud rules against that here. The best we could do was put the deposit on the card, and pay the rest by bank draft.

  4. Good luck!

    I, too, wasn’t allowed to pay for my car with a credit card. (The downpayment, anyway; I financed the balance.) They only let me put up to $2,500 on it, and the rest had to be done with a bank draft. Hope you have better luck getting those miles than I did!

  5. Car salesmen think every customer is dumb. Every customer walks in thinking they’re going to outsmart the car salesmen. In the long run, this is what these salesmen do for a living, and they know every trick you’re trying to use as well as how to get around every trick. In my opinion: decide on what you can afford, put up your best front in haggling, but accept what you can get. Frankly, I wouldn’t worry about it.

  6. Hey Ninja,

    I work at a dealership in New York (yes, I have to wash the slime off after work every day) and we only accept up to $3000 on a credit card. So your mileage may vary. But good luck!

  7. It probably won’t work because
    1 Usually dealership are structured as dealership LLC and service center LLC and only the service center has agreed to the merchant agreement accepts credit cards.
    2 If 1 is not the case. Credit cards companies aren’t like PayPal, one complaint isn’t going get the credit card company to terminate a merchant agreement. Also be prepared to spend 20 – 100 hours filling out signed and notarized forms in triplicate, and talking with representatives at the credit card company and your issuing bank to official file a complaint.

  8. Dude… All of this to save $250?! If there were another zero at the end, then I could understand all of this hullabaloo… but a couple hundred bucks! Who am I to question a Ninja, though, right? 🙂

    • Fortunately, I might not have to do the CC approach as I just realized the online advertisement from the dealership shows bluetooth as an option, but when I looked at the car, I don’t recall seeing any bluetooth capabilities. If the car doesn’t have it, then I will just say “We negotiated the price under the assumption that bluetooth was included (which is true) and now that we are finding out it’s not, we’d either like to have the price dropped to reflect the lack of that feature, or would like bluetooth to be installed so we are purchasing the vehicle as advertised.”

  9. Dude while I commend you for trying to get the best deal you can, the notion that $4500 difference is a ‘healthy profit’ is incorrect. As with a business after buying the car they do on top of that have overhead and payroll, as well as any work that needed to be done to bring it to the sale floor. 🙂

    Still wish you luck,

    • true, but that overhead gets spilt up across the hundreds of cars they sell each month. This one has been on the lot for less than 24 hours now (went up yesterday afternoon) so for them to have such a quick turn around on the sale is definitely a benefit. At the end of the day, they wont sell it to me for a loss and it sounds like $18,250 is their bottom, I’ll find out in a few hours.

  10. It seems to me you are being stingy over $250 just so you can feel like you won.

    Is it really worth all the trips and frustration of having this transaction be held over your head longer for $250?! What about all the groans, stares, and nasty looks when you try to play the credit card switcharoo trick (not like you are the only one who’s tried this)?

    I’m actually quite surprised GN is agreeing and/or going along with these antics over relatively little money (~1% of purchase price). I personally would be horrified. But, I’d possibly be $250 lighter too, who knows.

    Scared to see what kind of crazy clauses, add-on’s, inspections, negotiations, etc. you go through when you buy a house! Hope you get a good realtor….

    • I get that. I know it seems stingy, but the purchase price means nothing to me in terms of forfeiting $250. I could care less if the car was $2,000 or $80,000. $250 in my pocket is still $250 in my pocket. In reality, this negotiating doesn’t require an extra trip, because if they don’t budge I’ll just buy the car at the agreed upon price, but I don’t feel like it is unreasonable or even stingy to ask them to put it on my card. That would be my preference over cash so I get all the airline miles.

  11. I guarantee that they call you today to say they will sell the car for $18,000. My buddy told a dealership one price, and didn’t budge. They eventually called and he went in to sign the paperwork. You have the upper hand.

  12. Do you think it is against the visa policy to have a limit? We paid “cash” for our car, but actually charged $3k to the CC. That was the maximum. I didn’t even stop to consider whether or not they could do that.

  13. Good for you for standing your ground, but I’ll be surprised if they let you pay by credit card. BTW, how much is sales tax where you live? I remember being surprised on how much that drove the price of the car up at a dealership. Previously, I’d only bought private party cars or had hand-me-downs.

    • Whether you buy from dealership or from private party there is still taxes due on the purchase. The guy that bought our $8,200 corolla on craigslist had to pay a little over $700 at the DMV for the purchase. Taxes run about 9%.

      • Always talk out the door price with a car dealer. All fees, taxes, license etc wrapped up into one price. This takes away their game of adding fees and what not. If your $18,500 is not an OTD price, you are most likely paying too much.

        And I wouldn’t go into the dealership, I’d let them call me. Your merchant agreement idea is childish. You’ll get nowhere with it and the main reason they don’t want you putting the whole car on a credit card is so you don’t do a charge back, which heavily favors the customer.

        • We were negotiating out the door price the whole time actually. I just didn’t want to go in to that much detail in the blog post. In reality I told them I didn’t want OTD price over $20,000. The lowest they could go is $20,250. The only fee that would be negotiable is a $150 dealer service fee. I’ll have to pay taxes, licensing, and registration regardless of where or how I buy the car.

  14. Just as an FYI, the Durbin Amendment, which passed on June 29, 2011, allows to give discounts at the register to those who pay with cash or debit cards. Previously, Visa and MasterCard banned this practice in their merchant agreements. So, they could tell you that yes we will take your credit card, but it will cost you $250 more.

  15. I think I would attempt to split the difference before I would accep their offer. I always heard the limit on credit cards for cars was $3,000. Is the limit set by state.

  16. And your car salesman reads your blog and sees this, realizes that the cute couple trying to buy a Honda Pilot from him is actually the “Punch Debt in the Face” guy and then and then and then.

    Just kidding, goodluck!

  17. Best of luck to you! I had an ex who owned a dealership (here in Canada). Yes they make $200-$2000 on a car, but i know for him his dealership only sold about 20 cars a month. I remember one month was only 3 cars. So the profit might seem big, but sometimes it doesn’t stretch far enough!

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