Whether you think cryptocurrency is just a fad or the future of finance, it’s a fascinating technology. You probably made your last car purchase with boring old dollars, but maybe the next one will be with a digital currency.
If you’re wondering if you can buy a car with cryptocurrency, you’re in the right place. Let’s take a look at how it works and whether it’s a good idea. As with all money matters, it’s best to consult your financial adviser before making any investments.
What is cryptocurrency?
Cryptocurrency is a decentralized digital asset. Created in the wake of the 2008 financial crisis, Bitcoin BTCUSD, +0.32% is the original cryptocurrency. It is still the biggest by market cap and has inspired thousands of “altcoins.” Popular alternatives are Ethereum ETHUSD, -0.10%, Litecoin LTCUSD, +1.28%, Ripple, Solana SOLUSD, +0.19%, and more. The purpose of some cryptocurrencies is to be a store of value like “digital gold.” Others intend to be a medium of exchange like cash for buying and selling goods and services.
Another type of cryptocurrency is stablecoins. Stablecoins like USD Coin USDCUSD, -0.01% and Tether USDTUSD, are tied to government-issued currencies like the U.S. dollar and the euro. For example, one USDC is worth $1. Stablecoins serve as digital placeholders for real-world global currencies.
America’s largest cryptocurrency exchange is a website called Coinbase COIN, +7.73%. You can buy, sell, and manage hundreds of different cryptocurrencies on Coinbase. Merchants can use it as a payment processor for crypto, similar to PayPal PYPL, +2.01%.
How to buy a car with cryptocurrency
There are a few ways you can buy a car with cryptocurrency. Some online car marketplaces such as Car for Coin and BitCars allow you to exchange crypto — primarily Bitcoin — for a vehicle.
There is an easy way to use cryptocurrency as payment anywhere that accepts debit cards. Crypto debit cards like the BitPay Mastercard MA, +1.05% and Coinbase Visa V, +0.12% card work just like regular debit cards, but they draw funds from your crypto wallet rather than a bank account.
Some of BitPay’s trusted partners include RM Sotheby’s, Vegas Auto Gallery, and Mecum Auctions, but you can use a BitPay card anywhere Mastercard is accepted. You could use a crypto debit card for a down payment, monthly payments, and insurance payments, but you might have difficulty finding a dealer that lets you buy a car outright with a debit card.
BitPay supports many major cryptocurrencies like Bitcoin, Ethereum, and Litecoin, stablecoins like USD Coin and Binance USD, and even some memecoins like Dogecoin DOGEUSD, +0.29% and Shiba Inu SHIBUSD, 1.34.
A couple of other options in crypto debit cards include the CryptoWallet Mastercard and Crypto.com Visa card.
A list of dealers where you can buy with crypto
Some car dealerships across the country accept cryptocurrency as payment, but there are no manufacturers that accept crypto across their whole dealer network.
Here are a few dealerships that accept crypto via payment processors such as BitPay and Coinbase:
- Jeff Wyler Automotive Family in Ohio, Kentucky, and Indiana
- Carriage Auto Group in Georgia and Alabama
- Bob Moore Auto Group in Oklahoma
- Edmark Toyota in Nampa, Idaho
- Lamborghini Newport Beach in Irvine, California.
- Reed Jeep Chrysler Dodge Ram in Merriam, Kansas
- Porsche Towson in Towson, Maryland
- BMW of Rockville in Rockville, Maryland
- Motor Cars of Atlanta in Atlanta, Georgia
Tesla CEO Elon Musk has gone back and forth on accepting Bitcoin as payment at Tesla TSLA, +4.68% stores, but as of this writing, that system isn’t in place. However, if you’d like to buy a Tesla or another electric car with cryptocurrency, you might find some for sale on the crypto exchanges or at car dealerships mentioned above.
Should I buy a car with crypto?
Anyone who’s spent time with digital currency knows a great deal of risk is involved with all things crypto. Cryptocurrency values are extremely volatile.
For example, Bitcoin hit an all-time high of nearly $68,000 in November 2021. You could have bought a new Porsche 718 Cayman with one Bitcoin. However, as of this writing, Bitcoin’s value is hovering around $20,000. That same Bitcoin that could’ve bought a Porsche less than a year ago will now get you a base Subaru Impreza.
Since car values don’t fluctuate nearly as much as cryptocurrency values, stablecoins would be a good vehicle for paying for a car with digital currency. For example, putting USDC in a BitPay wallet and using that to make car payments is a safer way to pay for your car without worrying about the value of your crypto tanking.
If you’re a true believer in cryptocurrency, buying a car directly with crypto like Bitcoin could be a great way to put this innovative technology to use. Also, it might be fun to tell your friends you bought your car with Bitcoin.
This story originally ran on KBB.com.