You can buy a car with a credit card, but whether a dealer will let you is a different question. Most dealerships restrict credit card payments to a portion of the purchase, and those that accept more will often add a surcharge.
What Dealers Actually Allow
There is no law preventing you from using a credit card to purchase a car. The question is entirely about dealership policy, and policies vary significantly.
Most dealers will accept a credit card for a deposit or down payment, with common caps ranging from $2,000 to $5,000. Larger dealership groups sometimes allow up to $10,000. Full purchase by card is rare, and when it is permitted, it usually comes with conditions.
The reason for the restrictions is cost. Dealers pay a processing fee on every card transaction, typically between 1.5% and 3.5% of the amount charged. On a $40,000 car, that could be $600 to $1,400 coming directly off the dealer’s margin. That’s why most will draw a line on how much they’ll accept by card, or pass the cost on to you.
What Surcharges Cost and When They Apply
Some dealerships pass their processing costs to the buyer as a surcharge, typically 2% to 3% of the amount charged. On a $5,000 down payment, a 3% surcharge adds $150 to your cost.
Surcharges are legal in most states, but not all. As of 2025, states like Connecticut and Massachusetts prohibit credit card surcharging. Some states allow it but cap surcharges at a certain rate, such as Colorado, which caps surcharges at 2%. Always ask the dealer upfront whether a surcharge applies and factor that into your calculation before deciding to put anything on a card.
When Does It Make Sense To Buy A Car With A Credit Card
The appeal of using a credit card for a car purchase is usually rewards: cash back, points, or miles on a large transaction. Whether that math works depends on the surcharge and, critically, whether you can pay the balance off before interest kicks in.
Here are three scenarios on a $5,000 charge:
- No surcharge, 2% cash back card: You earn $100 in rewards. You come out ahead.
- 3% surcharge, 2% cash back card: You pay $150 to earn $100. You lose $50.
- Sign-up bonus scenario: You need $5,000 in spending to trigger a bonus worth $1,500. Even with a $150 surcharge, you net $1,350. This is the most likely scenario in which putting a car purchase on a card genuinely makes sense, especially if you otherwise wouldn’t be able to meet the sign-up bonus’s required spending amount within the allotted time.
Rule of Thumb
Rewards only win if they exceed the surcharge and you pay the balance before interest accrues. Carrying a balance on a card after a car purchase can quickly erase any reward advantage.
How to Verify a Dealer’s Policy Before You Go
Dealer policies change, and not every salesperson will know the specifics. Before you head in, call ahead and ask directly:
- Do you accept credit cards for down payments or partial payments?
- What is the maximum amount I can put on a card?
- Is there a surcharge for paying by card?
- Which card types do you accept? Some dealers restrict American Express due to higher processing fees.
It also helps to notify your card issuer before making a large transaction. Charges significantly above your typical spending pattern can be flagged as fraud and declined at the worst possible moment.
The Bottom Line
You can use a credit card to buy a car, or at least part of one, if the dealer allows it. The case for doing so is strongest when there’s a sign-up bonus in play, and you have the cash to pay the balance off immediately.
Outside of that scenario, the surcharge and interest rate math rarely works in your favor compared to a standard auto loan. Call ahead, know the dealer’s policy, run the numbers, and make sure any rewards you’re chasing actually outweigh what it costs you to earn them.
