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Thinking about using crypto to buy a car? It’s possible — but here’s what you should know first.
If you ever thought a single bitcoin would be worth enough to purchase a brand new car, we applaud your foresight.
About a decade ago, the term cryptocurrency would raise some eyebrows and provoke confused looks. People were skeptical at the thought of converting cash into digital coins — so actually buying a car with crypto was laughable.
Obviously, that’s no longer the case. Crypto’s changed the world of payment (and investment). Now, there’s software that merchants can use to enable crypto transactions. You can buy movie tickets. Add furniture and decor to your living room. Dabble in digital art. And, of course, you even have the option to buy certain vehicles with your digital currency.
To help you decide if buying a car with crypto is not only doable but also worth it, we’ve outlined everything you need to know.
What Is Cryptocurrency?
In the simplest terms, cryptocurrencies are a form of digital money. They were designed as a means of exchange — you can use them to purchase goods and services. But there’s a notable caveat: cryptos are decentralized. That means there isn’t a governing body (like the Federal Reserve) overseeing transactions. Instead, most cryptos are recorded digitally on a public ledger, known as a blockchain.
Bitcoin (BTC) was the first crypto, dating back to its 2009 release. It eventually gave rise to coins like Ethereum (ETH) and Litecoin (LTC). These came to be known collectively as “altcoins.” As they spread in popularity, people started viewing these digital assets as investments and stores of value. This helped accelerate the adoption of crypto over the last decade.
Are Cryptocurrencies Safe?
It depends on your definition of safe. There are thousands of coins circulating around the world, most of which are infrequently traded. However, the more well-known coins like Bitcoin, Ethereum, and Litecoin change hands millions of times per day. So, they’ve reached a point of legitimacy.
But these cryptos had little practical use or value during their early days. In fact, Bitcoin funded a lot of illicit activity since it was largely unregulated and practically anonymous. More recently, numerous crypto scams have surfaced and defrauded people out of their coin holdings.
For example, some fraudsters have launched fake coins in order to lure in investors — only to abandon the project and steal their money. This is known as an initial coin offering (ICO) scam.
And that’s just one example. There are various types of market manipulation, including rug pulls and pump-and-dump schemes. So, it’s important to be wary of investment red flags.
Fortunately, it’s not like the Wild West. Although crypto is decentralized by design, governments have increased their regulation of these assets. That has led to increased legal enforcement and involvement by the U.S. Securities and Exchange Commission (SEC).
On top of that, cryptocurrencies are quite risky from a stability standpoint.
Unlike fiat currencies, such as the U.S. dollar, cryptocurrency prices tend to be volatile. They could fluctuate immensely on any given day. On April 25, 2020, Bitcoin’s price was $49,059. Two weeks later, it was up to $58,238. And another two weeks after that, it was down to $34,742.
In terms of buying a car, you may have the funds to make a purchase today. But that’s not guaranteed to last if the value of your coins drops spontaneously.
How To Buy a Car With Cryptocurrency
Technically, people have been able to buy cars with cryptocurrency since day one. Similar to selling stocks, there was just the added step of converting crypto into cash and using the funds to make the purchase.
But high transaction costs can make that process less appealing. For instance, let’s assume you want to buy a new car with crypto. The average new car price recently hit a record high of $46,000. If you exchanged your crypto holdings into U.S. dollars and incurred a 2.5% transaction fee, you’d spend $1,150 just flipping currencies.
It goes without saying that it’s much easier to find car dealers that take cash or traditional financing. And unless you already hold a sizable amount of relevant crypto, it wouldn’t be prudent to convert your cash into coins for the sole purpose of buying a car.
For starters, you’d likely incur a tax liability on any gains. Moreover, crypto transaction costs will eat into the dollar value anyway. So, in most cases, crypto isn’t the most practical option.
But if you’re set on buying a car with crypto, it’s certainly doable. More dealerships accept crypto these days thanks to merchant software advancements and accessible Bitcoin wallets. You would just need to find an automotive dealer that’s convenient and able to process crypto payments.
How To Find a Dealership That Accepts Cryptocurrency
Only select dealerships accept cryptocurrency, and they typically only accept Bitcoin. Generally, these auto dealers work with a payment provider that offers software to facilitate crypto transactions.
For example, Coinbase Commerce allows businesses to accept and convert crypto into cash. This feature integrates with a merchant’s existing payment process, enabling customers to move coins from their wallets to a merchant’s wallet.
It’s possible to find dealerships with this functionality, but you might have to do some traveling. Here are eight options.
If an Altima, Rogue, or some other Nissan model is on your wishlist, you can make your way to Gainesville, Georgia. The Carriage Nissan dealership recently partnered with Coinbase to start accepting payments of Bitcoin.
But this payment method comes with limitations. Carriage Nissan does not allow the use of crypto for leases or alongside financing. So, your Bitcoin payment must cover the all-in purchase price, including tax, tag, and title.
Bob Moore Subaru
In 2019, the Bob Moore Auto Group partnered with Aliant Payments to bring crypto payment capabilities to its Oklahoma-based Subaru dealership. Subaru enthusiasts can buy a car, pay for vehicle parts, or cover repairs with their crypto — whether it’s Bitcoin, Ethereum, or Litecoin. And Alliant’s merchant mobile app, CryptoBucks, allows for crypto payments from any device.
Based in South Salt Lake, Utah, Prestman Auto has a diverse selection of models across multiple auto manufacturers, including Ford, Toyota, and Chevrolet.
Prestman Auto not only accepts crypto but also offers a fly-and-buy program, so you can buy a car even if you live out of state. The dealership will chauffeur you from the airport to the dealership for a test drive. Then you can drive it home or have it shipped.
Edmark Toyota accepts a broad range of crypto, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple, NEO, IOTA, Cardano, and USD Coin. So, if you’re based in Idaho or a neighboring state — and interested in buying a Toyota model with crypto — you can peruse Edmark’s selection of new and used cars.
Lamborghini Newport Beach
Lamborghini Newport Beach got into the crypto market early, accepting Bitcoin as a form of payment in 2013. Naturally, it experienced an influx of car sales when Bitcoin first took off in 2017. During the coin’s spike, this California dealership sold 10 Lamborghinis via Bitcoin in just one month.
Even with surging crypto prices over the last decade, you would still need at least three or four bitcoin to afford a Lamborghini. (Although that could change tomorrow.) The typical model ranges from $200,000 to $500,000.
MotorCars of Atlanta
MotorCars of Atlanta offers a broad range of high-end vehicles from brands like McLaren, Lamborghini, and Aston Martin. This dealership captured headlines in 2018 when a coder stepped onto the premises with 45 bitcoin and walked away with a Lamborghini Huracan — a $200,000 purchase.
Although its site doesn’t expressly state that this exotic car dealership accepts crypto, they have a history of making exceptions.
Post Oak Motor Cars
If high-end luxury and sports cars are your cups of tea, Post Oak Motor Cars of Houston, Texas accepts Bitcoin. This dealership’s selection of manufacturers includes Bentley, Bugatti, and Rolls Royce.
You also have the option of financing your purchase through an auto loan secured by Bitcoin. In other words, if you don’t want to sell your coins, you can take out an interest-free loan in U.S. dollars and use your Bitcoin as collateral.
Perhaps the most unique and digitally progressive option, BitCars helps crypto enthusiasts source and purchase vehicles from around the world. That includes supercar brands like Ferrari and Porsche, luxury car brands like Bentley and Rolls Royce, and premium car brands like Tesla and Mercedes-Benz. You can even find classic cars, SUVs, and RVs too.
True to its name, BitCars transacts exclusively in crypto. They also handle the payment process as well as all necessary documentation.
Tread Carefully With Cryptocurrency
There’s no doubt that crypto has experienced tremendous growth and adoption. More and more merchants are accepting Bitcoin and other reputable altcoins as legal tender. However, that doesn’t mean crypto is the ideal currency for purchasing a car. Unless you already hold a chunk of crypto, it’s probably best to stick with the tried and true U.S. dollar.