Since its public launch in 2009, cryptocurrency has become an increasingly popular currency. It was created during the 2008 financial crisis as a way for users to control their money themselves without the involvement of traditional financial institutions.
According to Statista, Bitcoin reached about 400,000 daily transactions in 2021 and Ethereum would be processed more than 1.1 million times per day. As you can see, in the past 12 years buying, selling, and using crypto has become so popular that people now use it to make larger purchases like cars
Can you purchase a car with cryptocurrency?
The short answer is yes. Of course, it is different from buying a car with cash or financing, but it is definitely possible. There are a few reasons to consider when buying a car with crypto, and each option has its own set of pros and cons:
Buy from a dealer who accepts cryptocurrency.
- Pros: Less transaction fees since you won’t have to convert your crypto into cash.
- Cons: It may be difficult to find dealers in your area who accept crypto as payment.
Buy from a private seller who accepts digital currency.
- Pros: Fewer transaction fees and a potentially faster process with less paperwork.
- Cons: It may be difficult to find private sellers, and the cost of a car from a private seller could be a lot higher than what you could pay at a dealership.
Convert your cryptocurrency into cash.
- Pros: You will have access to your crypto as cash which you could potentially use for other purchases.
- Cons: The fees for converting your crypto into cash can be very high.
Finance your car and make the payments with cryptocurrency.
- Pros: This will probably be the fastest option since most dealers are used to dealing with financing. If you need to refinance your auto loan, RateWorks can help!
- Cons: You will have to deal with transaction fees depending on if you need to convert your crypto to make the payments.
Should you purchase a car with cryptocurrency?
Now that you know it is possible to use crypto to buy a car, the decision on whether to purchase a car using crypto is entirely up to you. Some may think that using crypto to buy a car can be a better option. Crypto is safer, faster, and more convenient since it is a digital asset.
How do you purchase a car with cryptocurrency?
There are a few different options available to you when buying a car using crypto. Firstly, there is a website called BitCars where you can purchase cars using popular cryptocurrencies, and they even handle all necessary documentation. While they specialize in luxury cars, they also have regular options. As mentioned before, you can also do a quick google search to find what dealerships in your area accept cryptocurrency.
Once you have selected your car the final step is to make the actual purchase. You will more than likely have to download a secure crypto transfer app. Most car dealers will use BitPay but some may use BTCPay.
Is cryptocurrency legal?
Legal tender is currency approved by the government as a medium of transaction. So while crypto is legal, cryptocurrencies have no government or private backing. It has thus been difficult to prove its constitutionality to financial authorities around the world.
At the end of the day, cryptocurrency is money and can be used to purchase many different things. When making any large purchase, such as buying a car, weigh all of your options to be sure you are making the right decision.