Buying a Used Car with a Credit Card – What You Need to Know
Buying a Used Car with a Credit Card – What You Need to Know
Posted on May 6, 2025
In North York, Ontario, the idea of buying a used car with a credit card might sound convenient—just swipe, sign, and drive. But can you really do that? The answer isn’t as straightforward as it seems. While some dealerships may allow it, others might set limits or restrict it altogether. At Faraz Auto Sales, we want to make sure you understand all your options and how using your credit card fits into the bigger picture of smart car buying.
Is It Possible to Buy a Car with a Credit Card?
Technically, yes! You can buy a used car with a credit card, but it depends on the dealership. Some dealers may let you cover the entire cost on your card, while others might cap the amount you can charge, especially if it's just for the deposit or down payment. In North York, where used vehicle pricing can range widely, using a credit card for a $20,000+ car may raise eyebrows depending on your credit limit and interest rate.
Companies are usually hesitant to do so because of the added processing fees it charges them to accept credit card payments which can be up to 3%. At Faraz Auto Sales, we can walk you through exactly what your credit card can be used for and what might be better handled through financing. It’s all about helping you make the right financial move for your situation.
Pros of Using a Credit Card for Car Purchases
There are a few good reasons someone might want to put their car on plastic. If your credit card has a large enough limit and a low or 0% interest promotion, it could be a flexible and short-term way to finance a car without going through a lender. Some credit cards also offer cashback or rewards points, which could give you a nice bonus just for making the purchase.
There’s also the convenience factor—if you want to make a quick deposit or cover part of the cost without draining your savings, a credit card offers flexibility. For buyers in Ontario who are confident in their repayment strategy, this method can make sense.
The Downsides to Keep in Mind
Despite the perks, using a credit card for a big purchase like a car does come with risks. Most credit cards have high interest rates, especially compared to car loans. If you’re unable to pay off the balance quickly, interest charges can stack up fast and cost you far more than any cashback you earned.
Also, large charges can affect your credit utilization ratio. This can lower your credit score temporarily, which might be a concern if you're planning to apply for another loan or mortgage soon. Dealers may also charge an additional processing fee on credit card transactions, especially on large amounts. These fees could be anywhere from 1.5% to 3%—a few hundred dollars depending on the car's price. That extra cost could wipe out the benefit of using your card in the first place.
What Are Your Alternatives?
If you're not sure about putting the entire car purchase on your credit card, consider using it just for the down payment and financing the rest. Most Ontario dealerships, including Faraz Auto Sales, offer financing solutions with competitive rates that are often lower than standard credit card interest rates.
It’s also worth looking into personal loans or dealership financing specials that may offer lower rates, flexible terms, or added incentives. These options may provide the best of both worlds—affordable payments without the financial strain of maxing out a credit card.
Make the Right Move at Faraz Auto Sales in North York
At Faraz Auto Sales in North York, Ontario, we’re here to help you understand all your payment options and make the decision that works best for your budget and lifestyle. Whether you’re looking to use your credit card, secure financing, or trade in your current vehicle to lower your overall cost, we’ll walk you through it all, no surprises, no pressure.