Your complete A to Z guide for using cryptocurrency to purchase a car.
The use of digital currencies to purchase goods and services has massively increased over the past few years. More and more businesses are now offering customers the option to buy their products using cryptocurrencies.
According to a report by CNBC, over 100,000 businesses and companies now accept Bitcoin as a legitimate alternative for fiat money. These include popular companies like Microsoft, Wikipedia, and Expedia, etc.
The automotive industry is another sector that saw extensive adoption of cryptocurrencies. As the volatility and unpredictability associated with the price of digital currencies somewhat subsided, more people have started trading in the cryptographic form of money.
Buying a car with cryptocurrency:
The broader adoption of digital currency has led to their acknowledgment as a legitimate method of transaction in the automotive sector. Several dealerships now allow customers to use cryptocurrencies to purchase new and Buy a car.
The first recorded use of cryptocurrency as an alternative to fiat money to buy a car can be dated back to an automobile event in 2013.
An anonymous buyer purchased the 2014 Lamborghini Gallardo from a dealership in Newport Beach, California. The buyer spent 216.8433 bitcoins—or $209,995— using 4chan’s technology board.
Since that day, the use of cryptocurrencies to purchase cars has surged all over the world. If you are one of those early crypto-adopters who had accumulated hundreds of Bitcoins when it was trading for pennies, you may now be sitting on a fortune.
If you are thinking of using cryptocurrency to buy a car, you’ve got plenty of options at your disposal. In this blog, we have compiled a guide to help you out in the process.
1. Online purchase:
Buying a car online has become a swift process nowadays. Online dealerships have made it easy to choose a car, make the payment, and have it delivered at your doorstep. However, very few of them accept cryptocurrencies.
Fortunately, with the rising popularity and boom in cryptocurrency prices, some services have now emerged that cater to the needs of crypto enthusiasts.
These platforms offer an extensive choice of models to customers who intend to purchase a vehicle using digital coins. Many startups who do not accept digital payments directly have collaborated with intermediary platforms to do their cryptocurrency bidding.
Truebil, for instance, has joined hands with Unocoin to sell vehicles to cryptocurrency owners. If someone chooses to buy a car from Truebil, they have to pay the digital coins to Unocoin, who then deposits an equivalent amount of conventional money in Truebil’s account.
As the concept of purchasing a vehicle online with cryptocurrency is relatively new, it is advised to research the seller and the platform to avoid any scams.
2. Buy from a dealership:
The increased usage of digital payments has prompted many car dealerships to accept cryptocurrency as a mode of payment. These dealerships have also partnered with ‘middle-men’ and ‘intermediary’ services to facilitate the conversion of digital currency to fiat currency.
Although the prices offered by dealerships can be higher compared to private sellers, they also have a few advantages. They are reliable and provide extended warranties. If you have good negotiation skills, it is not hard to strike a profitable deal.
Similar to online car-buying platforms, the buyer should research the intermediary company before trusting them with your cryptocurrency. Read reviews and see what the past customers have to say about their experience with the company.
3. Search for private sellers:
Many people want to get started with digital currencies, but they do not know how to mine them. As a beginner, it is recommended to trade in your commodities, such as a car, in exchange for cryptocurrencies.
Buying a car from a private party comes with a lot of advantages. Since private sellers do not have the overhead of a dealership, you can expect a comparatively lower price than the market rate.
Moreover, their negotiation skills aren’t as sharp as a representative at a dealership. Hence, the playing field between a private seller and buyer is even, and both the parties can seal a good deal.
However, it’s pertinent to mention that most private-party car purchases lack a warranty coverage. To find private car sellers who may accept digital currency, you can check online forums, groups, and communities like Reddit, eBay, and Craigslist.
Search for sellers directly or get referrals for sellers who may be willing to trade in their ride for digital coins.
4. Convert your coins to cash:
The simplest way to buy a car with cryptocurrency is to first convert the coins into cash before making the purchase. Many online and offline trading platforms facilitate the conversion of digital coins into fiat currency for a small fee.
Here again, look up for the credibility of the trading service and check the exchange rate to ensure that you don’t suffer a loss when exchanging your digital coins with fiat money.
Things to keep in mind when using cryptocurrency to buy a car:
The concept of using cryptocurrency to buy goods and services is in its infancy. Its widespread usage is still a distant dream. While there are some undeniable benefits of digital currencies and the power of a distributed ledger, the technology is still prone to frauds and scams.
Here are some tips that will save you from frauds when purchasing a vehicle with digital currencies:
- Verify the platform by reading reviews and ask people who have previously used the platform to buy cars.
- Inspect the car in person before finalizing the purchase.
- Check with more than one dealer before buying to ensure that you get a competitive price.
Cryptocurrencies are seeing massive adoption in the automotive sector. However, like other technologies, they won’t become ubiquitous overnight.
As knowledge about digital currencies increases, we will see innovative solutions and more people trading in digital currencies to purchase goods and services. Until then, it is advised to be extra cautious when it comes to trading in cryptocurrencies