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How to buy a car with a debit card

Updated February 21, 2017

You can pay for a new or used car in many ways. A prospective buyer may choose to part exchange an old vehicle, pay cash for the car, finance the balance, or use a combination of all three payment methods. However, some people prefer use their debit card when buying a car. There can be an advantage if the debit card offers rewards such as cash back or air miles. But before you plonk down the plastic, there are some things that you need to take into consideration.

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  1. Check to see if you have a maximum daily limit that can be spent with your bank. Some banks place limits as to how much can be spent in a single day from a debit card current account. This can help prevent fraud if your card is lost your stolen. If your card does have a limit, ask the bank if it can make an exception for your car purchase.

  2. Ask the car dealer if it accepts debit cards. Many dealers separate the "parts and service" side of their business from the car sales element of their business. This is because each time a debit card is used, the dealership has to pay a transaction fee. If a transaction fee is 3 per cent, for example, it can cut into the dealer's profit. So while the dealer may accept the debit card for service and repair, it might not for a purchase.

  3. Pay for the car with your debit card. If the dealer does accept debit cards for car purchases, he will simply total up the amount due inclusive of taxes and swipe your card. Just make sure you have enough cash in the account or a large enough overdraft to pay for the total once those additional fees are added.

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About the Author

Scott Damon is a Web content specialist who has written for a multitude of websites dating back to 2007. Damon covers a variety of topics including personal finance, small business, sports, food and travel, among many others.

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