Can the GM BuyPower Card Help You Save on a New Car?

We’ve all heard of earning cash back, airfare, and hotel stays with credit card rewards, but what about a new car? The GM BuyPower card won’t let you earn new car per se, but it does let you save up rewards to make a hefty down payment. How? By rewarding you for every dollar you spend.

If you’re a GM enthusiast who is always trading up, this card probably sounds like a good deal. Like anything else, however, the devil may be in the details. Keep reading to learn how the GM BuyPower card works, who it’s good for, and why a different rewards card might work better.

GM BuyPower Card: How it Works

The GM BuyPower card works similarly to other rewards credit cards in that it doles out points based on how much you spend. With this card, you’ll earn 5% cash back on your first $5,000 in purchases every year. After that, you earn a flat 2% cash back on everything you buy, with no limitations or earnings caps.

So, if you managed to spend $10,000 on your card the first year, you would rack up $350 total – $250 during the 5% phase, and another $100 thereafter. If you spent $20,000 on your card during a single year, on the other hand, you would earn $550.

The good news is, this card lets you earn 5% back on your first $5,000 spent every year – and not just the first one. So, if you signed up for the card and spent $20,000 per year ($1,667 per month) for three years, you’d have a total of $1,650 in rewards – or about a 10% down payment on a Chevy Sonic or Cruze.

Beyond its lucrative earning structure, another great part about the card is that it doesn’t charge an annual fee. If you were to use it for regular purchases and pay it off every month, the rewards you earn would be truly “free.”

However, the kicker is that your rewards won’t really benefit you at all unless you’re planning on buying a new Chevrolet, Buick, GMC, or Cadillac vehicle.

Unlike other cash back cards, the BuyPower card doesn’t let you redeem points for cash back or gift cards. You can only redeem your points for a discount off a new car, and only through a licensed GM dealer. Plus, you can’t stack BuyPower card earnings with fleet vehicle incentive programs or the GM Employee discount.

You can, however, stack your rewards with some regular dealer incentives such as special financing deals. Is this a good deal? Well, it really depends.

Where the GM BuyPower Card Shines

If you’re especially loyal to Chevrolet, Buick, GMC, or Cadillac vehicles and expect to buy a new one in a few years, the GM BuyPower card could be an amazing addition to your wallet. In terms of cash back, I can’t think of any other card that offers 5% back on your first $5,000 spent followed by an unlimited 2% back with no limits. And since the 5% cash back “bonus” rolls back around every year, it’s almost like earning the signup bonus more than once.

With no annual fee, the GM BuyPower card becomes even more valuable. Better yet, this card offers 0% APR on purchases for your first 12 months. So, if you needed to make a large purchase and pay it off over several months, this card is a good option for that, too.

Where the GM BuyPower Card Breaks Down

While the GM BuyPower card makes sense for someone who’s in the market for a new GM vehicle, it makes almost no sense for anyone else. If you need a new car but aren’t decided on an exact make and model, for example, being tied down to a GM model, and particularly a new one, could leave you with limited options.

Speaking of that, it’s important to note that you can only use your rewards on a new vehicle. If you decide to buy used to save money, the rewards you earned would be basically useless.

And really, that’s the biggest drawback of this card; it lacks flexibility. With most traditional cash back cards, you can redeem your points for money in your bank account, a check in the mail, gift cards, or even merchandise. With the GM BuyPower card, you’re stuck with a discount on a new car — and that’s basically it.

Speaking of that, buying a new car may not be the smartest move anyway. According to Edmunds.com, the typical midsize sedan loses an average of $7,419 in value the first year. So, even if you build up a considerable amount in rewards, buying new means you’ll probably lose a considerable amount of money or equity in your car upfront regardless.

Related: Should You Always Buy a Used Car?

Who Should Get the GM BuyPower Card:

Someone who definitely wants to purchase a new Chevrolet, Buick, GMC, or Cadillac vehicle in the future.

Who Should Pass:

Someone who wants flexibility in how they spend their credit card rewards.
A person who’s interested in different car models and brands.
Anyone who might want to buy a used car instead of new.

Final Thoughts

If your heart is set on a new Chevrolet, Buick, GMC, and Cadillac vehicle, then the GM BuyPower card can help give a boost to your next down payment fairly effortlessly. By signing up and using the card for regular spending, you can earn hundreds of dollars per year good toward the purchase of a brand new GM car or truck.

If your car plans are up in the air, however, the GM BuyPower card could be more of a hindrance than a help. If you think you might buy a used car to save money, earning rewards that are only valid toward a new model won’t help. And who knows, you may wind up finding a better deal on a different make of car, too. With the GM BuyPower card, you’d be out of luck if you came across a stellar deal on a new Ford or Toyota, for example.

At the end of the day, most people find they’re better off the more options they have. And if you want a card that offers more flexibility, a regular cash back card is probably your best bet. Many of the top cash back cards come without annual fees, and some make it possible to earn anywhere from 2% to 5% back on nearly every purchase you make. And if you just so happen to use that cash back on a brand new GM vehicle, that’s perfectly okay, too — but at least you won’t be forced to.

Related Articles:

What’s your favorite way to earn rewards? Would you ever use credit card rewards to buy a car?

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