Auto related purchases make up a surprisingly large percentage of most American’s personal expenditures. Even if you only buy or lease a new car every five years, automobile sales, leases, parts, and service can easily comprise as much or more of our spending as gasoline. Fortunately, there are a wide variety of reward credit cards available from many major manufacturers.

Your Mileage May Vary

Why airline reward cards nearly always offer an identical one point per dollar, there are vast differences in automotive cards when it comes to the value returned. For example, the Subaru Card delivers 3% off your next purchase, while the BMW card essentially offers about 1% back. Frankly, I would not bother with any card that offers me a mere 1% back as a merchandise credit, when just about any card out there will offer you the same or better in cash.

Other Pitfalls

Before going down the automotive reward card path, find out how the reward is redeemed. If the reward does not apply to your best negotiated price, don’t even bother. What is the point of overpaying for your car only to receive an award? Also, check out the maximum annual credit and purchase limitations. The Subaru card limits you to only $500 a year. Therefore, you can only spend about $16,000 a year before your reward hits zero on subsequent purchases. The Cadillac card limits how much you can use towards the purchase of their more popular vehicles. Finally, the most obvious problem is that you are locking yourself into the purchase of a particular brand of vehicle, regardless of what the offerings of that company or its competitors will be in the future.

How This May Make Sense

If you are already leasing your car, and the manufacturer’s reward card’s credits can be applied to your existing lease payment, that is a good start. If the card offers you a greater return than your cash back card, you should look closely at it. Finally, vehicle owners who are anticipating large scheduled maintenance bills, or are contemplating expensive purchases of dealer accessories can earn greater rewards for dollars spent at their dealer while redeeming some credit towards their purchase.

This entry was posted on Thursday, October 9th, 2008 at 23:50 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.