Can I Buy This Car With Cryptocurrency?


A guy walks into a dealership. He wants to buy two cars for his two daughters. He asks the salesperson if he can pay with Bitcoin and shows off a digital wallet with a balance of $200 million. The salesperson tells the guy the dealership can’t take Bitcoin. The guy leaves.

Unfortunately, this is not a joke. This is a true story that illustrates how mainstream cryptocurrency has become, and how many dealerships are ill-equipped to leverage this new form of payment.

Sure, the guy could have sold some of his crypto, converted it into dollars and transferred it to his bank. He could have gone to the bank to get a cashier’s check and then come back to the dealership three days later to buy the cars. But he didn’t. He wanted to pay with crypto. Had the dealership been set up to take crypto, the transaction would have taken only a few minutes.

Crypto Is Here to Stay

Yes, the crypto market has “crashed” recently, as has the stock market. Every asset has its cycles. Some stocks are down more than 50%, but most consumers won’t stop buying cars because their stock portfolios are down – they know it’s temporary. Likewise, when the housing market corrects, people won’t stop buying cars because their house is worth less. The crypto market is no different.

Approximately 23% of U.S. consumers, or nearly 59.6 million people, owned at least one cryptocurrency in 2021, according to a recent survey by PYMNTS and BitPay, and nearly one-third of those consumers have used a digital currency to make a payment.

Adoption is growing. According to Ark Investment Management, in 2021 Bitcoin’s annual settlement volume of $13.1 trillion surpassed that of Visa. Recently the Biden Admin. paved the way for regulations around cryptocurrency to be drafted, which will allow big money to invest in crypto in a big way.

If you sell cars for a living, chances are you’ve already had customers who want to pay with crypto or finance a vehicle using their crypto as collateral. Why wouldn’t you accommodate them? I know a dealership that has accepted jewelry as down payment, another that accepted a farm combine in trade and another that took live cattle in trade. If the dealership gets paid in U.S. dollars, then why not accept cryptocurrency?

Crypto Readiness

Admittedly, the world of crypto is complicated. Any dealer can set up a wallet to accept crypto payments, but there are challenges involved. For one thing, sending and receiving crypto can be tricky; everyone has heard horror stories of people losing thousands of dollars because they sent crypto to the wrong address or used the wrong protocol to send it.

There are many types of crypto, so it’s important to establish a wallet that supports a variety of coins. Not everyone will want to pay with Bitcoin; you might get customers wanting to pay with Polkadot or Avalanche or stable coins.

Another issue with crypto is price volatility. If the price of a cryptocurrency drops during a transaction, you’ll want to change the crypto into dollars as quickly as possible after the transfer occurs. This would require a senior executive such as the chief financial officer, who has access to the wallet, to be available during every sales transaction, which is not realistic.

Fred Brothers.jpegFortunately, there are turnkey platforms designed to be deeply integrated into existing workflows at auto dealerships. Using a platform makes it easy for a dealership to accept crypto as payment and reduces the number of human transactions involved, along with associated errors.

With a crypto-lending platform, F&I managers are able to shop for crypto-secured loans in a marketplace just as easily as they shop for traditional loans. The exchange from crypto to U.S. dollars is completed instantly and automatically, eliminating any risk associated with crypto price volatility.

In my 30 years in fintech, I have never seen a financial services innovation be adopted as fast as crypto payment and financing solutions for auto. The retail auto industry is ready because their customers are asking for it.

Fred Brothers (pictured, above left) is president and co-founder of Cion Digital, a crypto payment and marketplace lending platform connecting consumers, merchants and lenders with new payment and loan options.



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