What credit card should you use to buy a car?

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

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. 

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?

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…

• HeyMax (mostly reliable, very easy)
• DBS “block card” method (extremely reliable, slightly more complicated)

…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:

Card	Amount	Earn Rate
UOB Pref. Plat Visa Apply	S$1,110	4 mpd (pay via mobile payments)
UOB Visa Signature  Apply	S$2,000	4 mpd (pay via mobile payments)
Citi Rewards + Amaze Apply	S$1,000	4 mpd
AMEX HighFlyer Apply	S$5,890	1.8 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.

Card	Amount	Earn Rate
UOB Pref. Plat Visa (x2) Apply	S$2,220	4 mpd (pay via mobile payments)
UOB Visa Signature (x2) Apply	S$4,000	4 mpd (pay via mobile payments)
Citi Rewards + Amaze (x2) Apply	S$2,000	4 mpd
AMEX HighFlyer Card Apply	S$1,780	1.8 mpd

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:

Card	AF	Spend	Miles^
Citi PM Apply	S$194.40	S$800	30,960
UOB PRVI Miles Apply	S$259.20	S$2K	48,000
HSBC T1 Apply	S$194.40	S$1K	21,200
DBS Altitude Visa Apply	FYF	S$2K	25,200 (as new)
DBS Altitude AMEX Apply	FYF	S$2K	14,200 (as existing)
SC Journey Apply	FYF	S$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:

Card	Spend	Miles
Citi Rewards + Amaze Apply	S$800	16,320
DBS Altitude Visa Apply	S$2K	25,200 (as new)
DBS Altitude AMEX Apply	S$2K	14,200 (as existing)
SC Journey Apply	S$3K	38,600
KrisFlyer UOB CC Apply	S$2K	27,400
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

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.