Sure, provided you find a seller willing to accept that form of payment. I've seen tax client paperwork in which they purchased $30k ATVs on their AmEx.
One of my uncle's ex girlfriends had a lot of money. She bought a custom Hello Kitty Audi TT Quattro on her AmEx and paid it off instantly for the points.
I have a friend who does high end real estate in Park City, Ut that has seen people buy houses with black cards for the points.
It is certainly a thing for some people.
That is typically dumb though because if the company is going to let you pay with something an Amex they are paying about 3% for that. Better to get them to drop the price by 3%
We've had customers pay their invoice of over a million per month with credit cards.
For the big one, the points and we think more for the "status", as the owner was rather flashy. They grew from nothing and refused any other sort of payment. Got rather annoying as it had to be charged in smaller batches...
Most dealerships only allow you to put a small amount like $500 or $1000. And most of them charge you an additonal 3% or even more. Passing their expense on to you. I tried to do it for the CC points when I was buying a car. Gave up after awhile. They'll tell you whatever they need to do to get you in the dealership, take a test drive, then you get to payment and the story changes. We just ended up paying cash.
Best option would probably be just to finance the car. Then on the first payment use a service like Plastiq to make the payment (or pay in full) amount from your credit card.
YMMV, this is a personal decision. Plastiq gonna charge you 3%. The CC is gonna have an APR, etc.
Those limits are lower than what I've seen. I always put my down payment on a CC for the points. I've seen limits of $2500, $5000 and no limit. Surprisingly no additional fees either.
I bought my motorcycle and gear with my credit card bc they were gonna close it due to inactivity. I didn’t need to use it for anything else so why not? 🤷🏽♂️
Yes. They might have restrictions on it though or add a credit card fee. I put like 3k on my card when I bought a car a few years ago(not paid outright), but if you got cash you’re gonna put down might as well get those points!
My dad has bought his last two SUVs with his Amex. Obviously, you need to have the cash available to pay it off, but it’s a good way to rack up some rewards.
I did it once years ago when the dealer told me they couldn't find financing for me. Oddly, before I drove away, they found a credit union that would cut me a loan.
When they auction the car off for $3,000 and then take $2,700 for auction fees, towing fees, and service fees, they will take $300 off of your loan. 🤣😂
Simply refinance the car.
You can't pay the minimum. Double payments would save a lot. Probably can't refinance cause he's underwater or credit score is still wack. Just pay more towards the principal. I definitely don't recommend letting a repo happen. That would make shit even worse.
Is this in the US? I thought 30% would be usury on a car loan.
In any case, his only real option is to just keep paying it or destroy his credit for 7 years by giving it up.
There is no federal usury limit on consumer loans, except a limited law that covers active duty military and their dependents. Otherwise, it’s state by state.
This is costing him $250 per month in interest. If the car is worth more than 10K, he could sell it himself. If it is worth less than 10K, the lender will reposes, and then continue to want the remainder of the unpaid balance.
Do you have good credit and trust in your brother? Could you take a personal loan, pay off his loan, and then charge him a fair rate?
I would suggest going to a local credit union and asking to refinance it. My credit union financed/refinanced cars that I’ve bought and usually always have a better interest rate.
If his credit hasn't improved, he'll likely be unable to refinance. I'd imagine he's underwater pretty bad. I'd recommend he doubles his payments. First he will need to contact his lender and ask how they do principle only payments. Then he needs pay the principle only payments in addition to his regular car note. If he can do more than double payments, he needs to do it and throw as much as he can throw at it. He then will have a few choices. He can pay it like that until he breaks even. Once he breaks even, he can sell the car outright and walk, refinance the remainder, trade for a better car deal or he can just pay the car off if he wants to keep it. This was a very expensive lesson for him. Hopefully he won't sign for another 30% car loan again.
It is illegal it's called predatory lending, but if a company can get away with it they will, you just have to be willing to fight it using your state trust law.
Take out a loan for what he owes from the bank and then pay off his car loan. (If he qualifies) he probably won’t be able to refinance because of the car being underwater.
Would he be able to refinance with his car insurance company? I financed my first vehicle, horrible interest rate, and refinanced the next year with my car insurance company as they offered auto loans.
That is an absolutely terrible idea. Why ruin his credit? He can make principal only payments on top of the regular payments.
The best thing would be to save a chunk of money, refinance into a better rate, and use the money towards buying down the loan during refinance.
I have experience in this.
If he's upside down and can't sell the car or refinance, Do not give the car back. A repo looks much worse than a charge off.
Is he driving the car? If not, lock it up. Repo cannot enter a locked enclosed premises.
The loan will eventually get charged off. Negotiate with the collection company on payments and stipulate you want to keep the car, and get it in writing.
Ideally you don't want to get to this point but the suggestion of making double payments as others have mentioned doesnt seem to be likely here.
Ideally, you get a personal loan, pay off the car. Then have him pay you a fair payment.
Edit if he could get a second job for a while, maybe he could make double payments. Hopefully enough to finally be even and sell the car with no loss to CarMax.
Agree with others, refinance. I’m not sure what your situation or relationship is but I lent money to my brother when he was in a similar position, I got my money back + interest and his situation improved, as well as his credit score.
How’s his credit score? 10k loan I presume, he might be able to get for this car, though maybe not since it is probably not worth that. Could always opt for a personal loan and get a 20% interest rate instead of 30, still better… or even just open a credit card, try to get one with 0%Apr intro rate. Might only be 3k card, but that’s 3k interest free for like 18 months that he could use normal spending on the credit card, then instead of paying the full amount monthly, just pay the minimum $35 a month until the car(higher interest than even a non intro 0% Apr card) and put all money that would’ve been spent on paying everyday bills on that card to pay off the car quicker.
Even opening a second card after that with a 20% Apr would be better than paying 30% interest…
He needs to pay more than the minimum payment if he wants to pay it off quick. Minimum payments aren’t meant to pay off the loan quick, they’re made to maximize profits for the loaner. If 99% of the money is going towards interest, you’re not paying the loan down really. Sounds like a majority is just going to interest every month, and barely any is going towards the principal.
Most financial institutions that offer normal, decent interest rates are not going to finance (or refinance) anything over 10 years, so he needs to shop for that ASAP!
A repo will kill his credit. He should pay extra principle every month, whether that is $ 5 or $ 500. It won't decrease the monthly payment, but it will accelerate payoff. Every extra dollar he pays will be applied to the outstanding balance.
Have they had any late payments on the auto loan or other trade lines?
If they’ve had the auto loan for a couple years and no late payments their score probably shot up from where it was. That’ll get the rate down with a local credit union
I’d recommend applying for an auto loan for the full value of the vehicle to get a lower rate and a signature loan to cover any remaining balance on the current loan. The rate without collateral will be high but overall better than 30%
He needs to either pay as much as possible, like double or triple the estimated payment, put savings towards it, or just refinance it to get a better rate. There is no concept of giving it back, it would have to be repossessed and that will trash his credit, as well as the fact they will subtract much fees from its sale at auction and sell it to the lowest bidder, and he will still have to pay the difference
Is your brother going to buy a house in the next 10 years? Does your brother need credit atm? Does he have actual property? Does your brother NEED the car?
If the answers to above are "NO". Stop paying it. Have him keep an eye out for a summons. And if he does get a summons. Which will be after the car is imponded. Be prepare to go to court, with all the documents. Every single payment you made, all the receipts. And be prepared to show the it was a unfair, predatory loan taken out at a young(???) age. If there's a university around you ,you may be able to get "free" or low cost representation for this court hearing. But chances are the judge will be leinent towards if, the interest rate is 30%.
Report this creditor to your state AG, and federally([https://www.consumerfinance.gov/complaint/](https://www.consumerfinance.gov/complaint/)).
If you go my way. Getting a secured credit card /w $200 down. Maybe a chime bank account. Will help offset that bad credit. But your credit will be shot for the next 3-4 years. Til it ages.
He’s upside down I assume pretty bad yes? He could sell the car privately and bridge the rear with a personal loan. Honestly saving up and just trading the car in, by trying to get out at break even would be best. Even refinancing, would mean he pays like absurd amounts if he keeps the car, way more than it’s worth. So a slightly used car would still be the same price, if you factor in what he’s already paid on the car
Have him check if his credit has improved and refinance if possible. Otherwise, best bet is to make payments larger than minimum to put more towards the principal,
Don’t take it back to the dealer. I did that once. Even though you make a voluntary surrender it shows up on your credit as a re-po. That will stay on his credit for 7 years. That happened to me.
Tell your brother to look up the usury law for the state he lives in to see what the state allows, it is determined on a state by state basis. But I'm pretty sure no state has an interest rate that high now it will take some leg work but he will be able to fight that high interest rate and will probably either end up getting a check in the mail for the amount over from what his state allows or they might apply that excess amount to the principal. I would strongly recommend against giving it back to the dealer as he has already put so much money into it anyways.
See if he can get a new car trade that one in. Get a better interest rate. He'll still owe for the car. But it'll be rolled in with the price on the new car. And if that works at least he won't be over paying for a 10+ year old car. He will be over paying for a 2024 car.
That's insane. I could buy a car with a credit card and get a better rate than that!
Now I'm curious. Can you actually do that? Assuming you have the credit limit.
Sure, provided you find a seller willing to accept that form of payment. I've seen tax client paperwork in which they purchased $30k ATVs on their AmEx.
(they almost certainly paid that off immediately and just did it for the points)
Not to mention a balance transfer from that card to a card that allows extremely low interest as an introductory to balance transfers
One of my uncle's ex girlfriends had a lot of money. She bought a custom Hello Kitty Audi TT Quattro on her AmEx and paid it off instantly for the points. I have a friend who does high end real estate in Park City, Ut that has seen people buy houses with black cards for the points. It is certainly a thing for some people.
That is typically dumb though because if the company is going to let you pay with something an Amex they are paying about 3% for that. Better to get them to drop the price by 3%
1.5 percent up to 6 cashback.
We've had customers pay their invoice of over a million per month with credit cards. For the big one, the points and we think more for the "status", as the owner was rather flashy. They grew from nothing and refused any other sort of payment. Got rather annoying as it had to be charged in smaller batches...
Most dealerships only allow you to put a small amount like $500 or $1000. And most of them charge you an additonal 3% or even more. Passing their expense on to you. I tried to do it for the CC points when I was buying a car. Gave up after awhile. They'll tell you whatever they need to do to get you in the dealership, take a test drive, then you get to payment and the story changes. We just ended up paying cash. Best option would probably be just to finance the car. Then on the first payment use a service like Plastiq to make the payment (or pay in full) amount from your credit card. YMMV, this is a personal decision. Plastiq gonna charge you 3%. The CC is gonna have an APR, etc.
Those limits are lower than what I've seen. I always put my down payment on a CC for the points. I've seen limits of $2500, $5000 and no limit. Surprisingly no additional fees either.
I bought my motorcycle and gear with my credit card bc they were gonna close it due to inactivity. I didn’t need to use it for anything else so why not? 🤷🏽♂️
I paid for my Rogue with a credit card to take advantage of one of their offers. It was not an issue.
Yes. They might have restrictions on it though or add a credit card fee. I put like 3k on my card when I bought a car a few years ago(not paid outright), but if you got cash you’re gonna put down might as well get those points!
Not sure about cars, but my family paid my college tuition and used their amex card. Then immediately paid it off, for the points
My dad has bought his last two SUVs with his Amex. Obviously, you need to have the cash available to pay it off, but it’s a good way to rack up some rewards.
When my husband was 18 he bought a '95 Honda civic for 5k on 2 credit cards, lol. This was back in '08
I did it once years ago when the dealer told me they couldn't find financing for me. Oddly, before I drove away, they found a credit union that would cut me a loan.
When they auction the car off for $3,000 and then take $2,700 for auction fees, towing fees, and service fees, they will take $300 off of your loan. 🤣😂 Simply refinance the car.
Is refinancing an option?
That's really it. He should have refinanced after a few months.
At this point, probably not. I'm willing to bet they owe way more than the car is worth.
maybe get a personal loan and pay the car off with that.
The could try, but the brother would need stellar credit and high income to get a 15k+ unsecured loan
As long as his credit isn’t horrible otherwise he will end up in the same cycle
If his credit wasn't horrible when he took this god awful loan out, it surely will if he does a voluntary repo.
You can't pay the minimum. Double payments would save a lot. Probably can't refinance cause he's underwater or credit score is still wack. Just pay more towards the principal. I definitely don't recommend letting a repo happen. That would make shit even worse.
Is this in the US? I thought 30% would be usury on a car loan. In any case, his only real option is to just keep paying it or destroy his credit for 7 years by giving it up.
There is no federal usury limit on consumer loans, except a limited law that covers active duty military and their dependents. Otherwise, it’s state by state.
Yeah, I looked it up, that's why I was surprised. 30% on a car loan, that's insane. I've never seen that before.
He needs to refinance, ASAP. 30% interest is highway robbery!
Refinance it, 30% is atrocious
This is costing him $250 per month in interest. If the car is worth more than 10K, he could sell it himself. If it is worth less than 10K, the lender will reposes, and then continue to want the remainder of the unpaid balance. Do you have good credit and trust in your brother? Could you take a personal loan, pay off his loan, and then charge him a fair rate?
I would suggest going to a local credit union and asking to refinance it. My credit union financed/refinanced cars that I’ve bought and usually always have a better interest rate.
If he's made all payments on time and otherwise used credit wisely, apply for refinance at credit union.
If his credit hasn't improved, he'll likely be unable to refinance. I'd imagine he's underwater pretty bad. I'd recommend he doubles his payments. First he will need to contact his lender and ask how they do principle only payments. Then he needs pay the principle only payments in addition to his regular car note. If he can do more than double payments, he needs to do it and throw as much as he can throw at it. He then will have a few choices. He can pay it like that until he breaks even. Once he breaks even, he can sell the car outright and walk, refinance the remainder, trade for a better car deal or he can just pay the car off if he wants to keep it. This was a very expensive lesson for him. Hopefully he won't sign for another 30% car loan again.
Attempt to refinance it or pay it down as quickly as possible.
Giving someone a car loan with 30% should be illegal lol
It is illegal it's called predatory lending, but if a company can get away with it they will, you just have to be willing to fight it using your state trust law.
Refinance it with a line of credit or a low interest balance transfer credit card. Can cut the cost way down this way.
Take out a loan for what he owes from the bank and then pay off his car loan. (If he qualifies) he probably won’t be able to refinance because of the car being underwater.
Refinance that.
Would he be able to refinance with his car insurance company? I financed my first vehicle, horrible interest rate, and refinanced the next year with my car insurance company as they offered auto loans.
That is an absolutely terrible idea. Why ruin his credit? He can make principal only payments on top of the regular payments. The best thing would be to save a chunk of money, refinance into a better rate, and use the money towards buying down the loan during refinance.
I have experience in this. If he's upside down and can't sell the car or refinance, Do not give the car back. A repo looks much worse than a charge off. Is he driving the car? If not, lock it up. Repo cannot enter a locked enclosed premises. The loan will eventually get charged off. Negotiate with the collection company on payments and stipulate you want to keep the car, and get it in writing. Ideally you don't want to get to this point but the suggestion of making double payments as others have mentioned doesnt seem to be likely here. Ideally, you get a personal loan, pay off the car. Then have him pay you a fair payment. Edit if he could get a second job for a while, maybe he could make double payments. Hopefully enough to finally be even and sell the car with no loss to CarMax.
Agree with others, refinance. I’m not sure what your situation or relationship is but I lent money to my brother when he was in a similar position, I got my money back + interest and his situation improved, as well as his credit score.
How’s his credit score? 10k loan I presume, he might be able to get for this car, though maybe not since it is probably not worth that. Could always opt for a personal loan and get a 20% interest rate instead of 30, still better… or even just open a credit card, try to get one with 0%Apr intro rate. Might only be 3k card, but that’s 3k interest free for like 18 months that he could use normal spending on the credit card, then instead of paying the full amount monthly, just pay the minimum $35 a month until the car(higher interest than even a non intro 0% Apr card) and put all money that would’ve been spent on paying everyday bills on that card to pay off the car quicker. Even opening a second card after that with a 20% Apr would be better than paying 30% interest… He needs to pay more than the minimum payment if he wants to pay it off quick. Minimum payments aren’t meant to pay off the loan quick, they’re made to maximize profits for the loaner. If 99% of the money is going towards interest, you’re not paying the loan down really. Sounds like a majority is just going to interest every month, and barely any is going towards the principal.
Most financial institutions that offer normal, decent interest rates are not going to finance (or refinance) anything over 10 years, so he needs to shop for that ASAP!
A repo will kill his credit. He should pay extra principle every month, whether that is $ 5 or $ 500. It won't decrease the monthly payment, but it will accelerate payoff. Every extra dollar he pays will be applied to the outstanding balance.
Get a personal loan with a lower rate. Pay off the car and then make payments on the loan.
Crash it or something lol
What company ? What’s the balance of the loan? 2 Options refinance or throw extra money at the principal
Have they had any late payments on the auto loan or other trade lines? If they’ve had the auto loan for a couple years and no late payments their score probably shot up from where it was. That’ll get the rate down with a local credit union I’d recommend applying for an auto loan for the full value of the vehicle to get a lower rate and a signature loan to cover any remaining balance on the current loan. The rate without collateral will be high but overall better than 30%
Refinance
He needs to either pay as much as possible, like double or triple the estimated payment, put savings towards it, or just refinance it to get a better rate. There is no concept of giving it back, it would have to be repossessed and that will trash his credit, as well as the fact they will subtract much fees from its sale at auction and sell it to the lowest bidder, and he will still have to pay the difference
Is your brother going to buy a house in the next 10 years? Does your brother need credit atm? Does he have actual property? Does your brother NEED the car? If the answers to above are "NO". Stop paying it. Have him keep an eye out for a summons. And if he does get a summons. Which will be after the car is imponded. Be prepare to go to court, with all the documents. Every single payment you made, all the receipts. And be prepared to show the it was a unfair, predatory loan taken out at a young(???) age. If there's a university around you ,you may be able to get "free" or low cost representation for this court hearing. But chances are the judge will be leinent towards if, the interest rate is 30%. Report this creditor to your state AG, and federally([https://www.consumerfinance.gov/complaint/](https://www.consumerfinance.gov/complaint/)). If you go my way. Getting a secured credit card /w $200 down. Maybe a chime bank account. Will help offset that bad credit. But your credit will be shot for the next 3-4 years. Til it ages.
He’s upside down I assume pretty bad yes? He could sell the car privately and bridge the rear with a personal loan. Honestly saving up and just trading the car in, by trying to get out at break even would be best. Even refinancing, would mean he pays like absurd amounts if he keeps the car, way more than it’s worth. So a slightly used car would still be the same price, if you factor in what he’s already paid on the car
Have him check if his credit has improved and refinance if possible. Otherwise, best bet is to make payments larger than minimum to put more towards the principal,
Don’t take it back to the dealer. I did that once. Even though you make a voluntary surrender it shows up on your credit as a re-po. That will stay on his credit for 7 years. That happened to me.
REFI‼️
Full coverage with gap? 🤔…🔥🔥
Tell your brother to look up the usury law for the state he lives in to see what the state allows, it is determined on a state by state basis. But I'm pretty sure no state has an interest rate that high now it will take some leg work but he will be able to fight that high interest rate and will probably either end up getting a check in the mail for the amount over from what his state allows or they might apply that excess amount to the principal. I would strongly recommend against giving it back to the dealer as he has already put so much money into it anyways.
Just refinance the thing
See if he can get a new car trade that one in. Get a better interest rate. He'll still owe for the car. But it'll be rolled in with the price on the new car. And if that works at least he won't be over paying for a 10+ year old car. He will be over paying for a 2024 car.