What credit card should you use to buy a car?

Miles advice for the worst financial decision of your life.

So, I’ve gone and bought myself a car.

Step 2: Go back to November 2008 for $2 COE

I know, I know. With today’s COE prices, what kind of idiot does that? It’s certainly not going on my highlights reel for “best financial decisions ever”, and I don’t even like driving- at least not in Singapore, where traffic is stop-start, there’s nothing interesting to see, and most drivers seem to have bought the trim without turn signals.

But with the MileCub’s arrival, I’m going to need a car for the foreseeable future (there’s nothing like a 1.5 tonne mobile command centre loaded with diapers, clothes, changing mats and milk powder). And so I made the trip to the showroom, to make the second biggest purchase of my life.

As for what exactly I bought, let’s just say I won’t be drag racing with Naomi Neo. It’s Korean, the publicity materials tell me it sips less than 5 litres of petrol per 100km, and The MileLioness tells me it won’t attract any babes (apart from the one in the back seat). In any case, the wisdom (or lack thereof) of my decision isn’t the focus here.

Rather: assuming you’re buying a car, what’s the best miles strategy? 

While this is one of the questions I get asked the most, I’ve never bothered to write a specific post because it’s not like there’s any cards which offer special bonuses for car purchases. 

💡 Well, there was this one time…

Fine. There’s three cases I can think of where credit cards offered upsized rewards for car purchases:

  • Back in 2021, OCBC VOYAGE offered an extra 1 mpd on transactions at car dealerships on two separate occasions, capped at S$10,000/S$20,000
  • Mazda used to be a Platinum 10Xcelerator merchant, which meant you could swipe your AMEX Platinum Charge and earn 7.8 mpd on up to S$5,000 of booking fees. This ended sometime in 2022
  • Till 20 September 2023, UOB has a tie up with Lexus that offers its premium cardholders (UOB Reserve Card, UOB Visa Infinite Metal Card, UOB Privilege Banking Card and UOB Visa Infinite Card) a flat 104,000 miles when they pay for their S$23,000 deposit

This means you approach it the way you would any other big ticket spend:

  1. Use sign-up bonuses
  2. Put what you can on specialised spending cards that earn bonuses for generic online or offline transactions
  3. Put the rest on general spending cards

That said, now that I’ve personally gone through the process, I might as well put it down for posterity.

What MCC are car dealerships?

0-100 in 9.7s (km/h), 100-0 in 9.7s (wallet)

Let’s tackle the most fundamental question first- what MCC do car dealers code as?

Car dealers in Singapore generally code under the following MCCs:

  • MCC 5511 Automobile and Truck Dealers-Sales, Service, Repairs, Parts and Leasing
  • MCC 5521 Automobile and Truck Dealers (Used Only)- Sales
  • MCC 7538 Automotive Service Shops

You can always confirm the MCC before spending using either…

…but ultimately it doesn’t really matter, because none of these MCCs are on the exclusion list of any bank.

Do car dealers accept credit cards?

While I can’t speak for every car dealer out there, I will tell you that the vast majority accept credit cards (at least the authorised dealers, I don’t know about parallel importers or used car places).

Obviously, no dealer is going to let you swipe the full cost of the car — the fees they’d pay would be cost-prohibitive — but you can use a credit card to pay the initial deposit/booking fee.

This amount will vary from dealer to dealer, but in my case it was S$10,000. I was able to pay with any credit card I wished (AMEX, Mastercard, Visa), and split the transaction over multiple cards. No additional fees were chargeable.

I split the S$10,000 as follows:

CardAmountEarn Rate
UOB Pref. Plat Visa
Apply
S$1,1104 mpd
(pay via mobile payments)
UOB Visa Signature 
Apply
S$2,0004 mpd
(pay via mobile payments)
Citi Rewards + Amaze
Apply
S$1,0004 mpd
AMEX HighFlyer
Apply
S$5,8901.8 mpd

This gave me a total of ~27,000 miles, or an average of 2.7 mpd. 

Now, at this juncture I want to emphasise that even though this was probably the best outcome I could have hoped for in my present circumstances, it’s far from the optimal strategy.

If I could do this all over again, I would fully leverage two-player mode by getting The MileLioness to:

  • Get a UOB Visa Signature, UOB Preferred Platinum Visa and Amaze + Citi Rewards Card combo of her own
  • Get a few cards with sign-up bonuses

Here’s an idealised scenario of how that S$10,000 transaction could have gone down:

Just relying on category spend bonuses

If I wasn’t in a position to take advantage of sign-up bonuses, I could have simply have leveraged a second UOB Visa Signature, UOB Preferred Platinum Visa and Amaze + Citi Rewards Card to pay S$8,220 at 4 mpd. The remaining S$1,780 would go on the AMEX HighFlyer Card at 1.8 mpd, for a grand total of ~36,000 miles.

CardAmountEarn Rate
UOB Pref. Plat Visa (x2)
Apply
S$2,2204 mpd
(pay via mobile payments)
UOB Visa Signature (x2)
Apply
S$4,0004 mpd
(pay via mobile payments)
Citi Rewards + Amaze (x2)
Apply
S$2,0004 mpd
AMEX HighFlyer Card
Apply
S$1,7801.8 mpd
❓ Online payments?

I’ve heard that some dealers like Tesla send an online payment link for deposits, and in that case you can use the DBS Woman’s World Card (S$2,000 @ 4 mpd) and Citi Rewards Mastercard/Visa (S$1,000 @ 4 mpd).

Of the cards mentioned in the table above, you would not be able to use the UOB Preferred Platinum Visa (because online transactions use a whitelist, which doesn’t feature car dealer MCCs) or the UOB Visa Signature (because the transaction isn’t in foreign currency). 

Just relying on sign-up bonuses

Alternatively, if I had all the sign-up bonuses at my disposal, I could split the S$10,000 as follows:

CardAFSpendMiles^
Citi PM
Apply
S$194.40S$80030,960
UOB PRVI Miles
Apply
S$259.20S$2K48,000
HSBC T1
Apply
S$194.40S$1K21,200
DBS Altitude Visa
Apply
FYFS$2K25,200
(as new)
DBS Altitude AMEX
Apply
FYFS$2K14,200
(as existing)
SC Journey
Apply
FYFS$2.2K*28,067*
^Includes base + bonus miles. Based on sign-up bonuses available at the time of writing; for the latest options always refer to this page
*SC Journey Cardholders must spend S$3K in the first 60 days to receive 35,000 bonus miles. I’ve pro-rated this to reflect $2.2K spend (25,667 bonus miles + 2,400 base miles) with the assumption that you’ll spend $800 elsewhere (obviously there’s no pro-rating in real life, where it’s all or nothing!)

Following the strategy above, I’d earn about 167,600 miles, with mandatory annual fees of S$648.

Alternatively, if I didn’t want to pay any annual fees at all, then I could use the following cards instead:

CardSpendMiles
Citi Rewards + Amaze
Apply
S$80016,320
DBS Altitude Visa
Apply
S$2K25,200
(as new)
DBS Altitude AMEX
Apply
S$2K14,200
(as existing)
SC Journey
Apply
S$3K38,600
KrisFlyer UOB CC
Apply
S$2K27,400
Put the remaining S$200 on AMEX HighFlyer Card @ 1.8 mpd

The total here comes up to 122,080 miles, with no annual fees in sight. 

In reality, it’ll probably be a mixture of both sign-up bonuses and specialised spending cards for most people. The important thing is that it’s very much possible to generate a six-digit miles return from this transaction, provided you plan in advance and time your card applications. 

What about the car loan?

Use code MILELION to save S$30 off your first payment, with no minimum payment required

If you’re taking out a car loan, you can earn additional miles by paying the instalments via CardUp (Citi PayAll does not support car loans at this time).

You’ll need to provide the following documentation:

  • Hire purchase agreement
  • Recent bank statement that states your name, bank account number and GIRO deduction
  • If your GIRO is newly set up, please provide the GIRO approval letter/email

You can use the promo code RECURRING185 to pay a 1.85% admin fee (instead of the usual 2.6%), which reduces the cost per mile to 1.3 cents each, assuming you pay with a 1.4 mpd card (only Visa cards are accepted for this code).

If you’re a first-time CardUp user, don’t forget to use the code MILELION to save S$30 off your first payment. You can subsequently apply RECURRING185 to the rest of your payments to enjoy the 1.85% rate. 

For the best cards to use with CardUp, refer to the post below. Do note that American Express and Citibank cards cannot be used for car loan payments.

What’s the best card to use for CardUp?

Conclusion

My new car in warranty-void mode

Buying a car is never going to be a painless event, but with most dealers accepting credit cards for the booking fee, there’s at least some salve for the burn.

I’m reliably informed that all car purchases are a matter of negotiation anyway (which I am abjectly awful at), so it never hurts to ask the salesperson whether a higher card swipe amount could be thrown in as part of the incentives.

As for me, I’m off to pimp my ride with a 360° car seat and a politically-incendiary bumper sticker.

Aaron Wong
Aaron Wong
Aaron founded The Milelion to help people travel better for less and impress chiobu. He was 50% successful.

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Bruno

For online payment links only:

I’d also throw the Citi SMRT in once all 4mpd options are exhausted.

While I’m a big miles fan, 5% cashback on a straightforward 12K annual spending cap imho trumps all max 1.8MPD general spend miles cards for big ticket purchases.

Using a 1.2-1.8mpd card when the SMRT is an option is like buying miles at over 2.5cpm.

Naro

citibank smrt would be an option only if its payment via an online link

Last edited 6 months ago by Naro
Bruno

That’s what I mentioned.
Now I guess it’s good possible that at some point either

  • Citi SMRT gets moved to the Mastercard network
  • Amaze starts accepting Visa cards (like Curve does in Europe).

That would also open up 5% on offline usage via AMAZE.

(If Amaze and/or SMRT rewards don’t get nerfed by then at least, which is also good possible).

Naro

Oops. Sorry, didnt see that!

Naro

Just a suggestion, apply for supplementary card would make things easier.

Especially for the UOB Lady’s soliaire. Choose 2 different qualifying categories for each person. You have 4 categories in total for 6mpd

Just Passing by

Wait a minute – does this work ? thought supplementary card shares same category and cap ?
https://milelion.com/2023/07/02/complete-faqs-uob-ladys-ladys-solitaire-card/

Naro

I meant each spouse apply an uob ladys solitaire card. Then apply supplementary card for each other.

Lifshitz

As a father of two toddlers (1&3), carfree with kids is entirely possible in SG…

powersteer

How could you!
Getting a new car, pay > 100k for COE alone? Noooooooo

You shd have got a well used car, this way, you pay less

Matthew

Haha, u know it’s all about “status and face” when someone buys a new car with an outrageous price! I have a well used 17yr old car for my family and it works fine

Din Viesel

Isn’t it better to use UOB Krisflyer card pairing with Amaze, than AMEX Highflyer for the 3mpd uncapped? unless I am missing something..

Anon

KF online bonus is only for selected MCC. Car dealerships are not inside

The Mandalorian

It’s been many years since I’ve dealt with a car dealer, but back in the days, the most common sale package involved “max 3 bids” or “max 6 bids” clauses where, if COE bidding (by the dealer on your behalf, at whatever amount they deem fit) remains unsuccessful at the end of agreed number of attempts, you have 2 options: (1) walk away & get a refund of your booking fee (2) “top-up” a certain amount for dealer to release one of its stash of Open Cat CEOs for you While (2) represents further potential for miles (if viewed optimistically… Read more »

anon

No credit card has a swipe limit of a car anyway LOL

CREDIT CARD SIGN UP BONUSES

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