How I Bought my Tesla with Gift Cards

Posted By Ben Nickel-D'Andrea on Jan 9, 2020 | 21 comments

It’s long been a dream of mine to own an electric vehicle, and I’d like to say it’s only from an environmentally conscience perspective, but it’s mostly because it’s the closest I’ll ever get to piloting a space craft.

White Tesla from Tesla’s Website

But if there’s one rule in our household, it is that nothing -absolutely nothing- gets purchased without earning miles or points out of the transaction. Of course the first thing I did when I got interested in a Tesla Model 3 was to ask about the possibility of putting it on one of our credit cards. I had been religiously saving for a few years, so I had the money comfortably sitting in my bank account but I wasn’t willing to just write a check and leave all those miles and points on the table. That would be dumb.

After doing some research and getting extremely frustrated with the utter impossibility to do any serious mileage earning off this purchase and just about ready to quit this quixotic task, it dawned on me that nothing worth having is within easy reach. The answer was to turn something mundane and easy into a complex, roundabout activity to squeeze more juice out of the same oranges.

Tesla Checkout from Website

The sticker price of a Tesla model 3 is $39,490 for the most basic model without any bells and whistles (not true, the most basic Tesla is a treasure trove of bells and whistles, but I digress). Tesla only allows you to put down a $2,500 deposit on your credit card to secure the delivery of your car. That left $36,990 I needed to get some points from.

Challenge Accepted

The easiest way to do this, would have been to go to an online bill pay service such as Plastiq (if you’re not on it already, here’s a referral link with which you will get your first $500 fee free), choose my preferred credit card and earn the points. However, this comes with a high percent fee being added to the overall cost. Depending on promotions, I would have paid between $739.9 and $1,109.7 in additional fees if I used a credit card to pay directly through this service, considering their standard 2 to 3% fee. I wasn’t having it.

Since I didn’t want to run into additional costs, for the purposes of this challenge, I settled for a maximum of $200 in surcharges and fees in exchange for earning the most amount of miles and points possible. In order to do that, I decided I couldn’t go with a credit card that only earned one point for every dollar spent.

Plastiq’s Welcome Site

I could have easily paid with an airline card and earned 35,000 airline miles or even a hotel card and earned 35,000 hotel points. It was time for me to take a look at what I had in my wallet and see what options I had that earned me more than that.

Credit Card Options

First, the American Express Gold, which earns 4x Membership Rewards at supermarkets. This benefit here being that anything you purchase within the confines of the walls of the supermarket earns 4x membership rewards points.

Second, the Hilton Honors American Express Surpass, earning 6X at grocery stores. Much along the same thread as the Amex Gold, but as with all things in the points and miles space, diversification is key. Since this card also earns 6x Hilton Honors points at supermarkets, I could also top off my Hilton balance for some hotel stays.

Finally, the Chase Ink Business Cash, which gives you 5X at office supply stores. Once again, anything you purchase within the confines of the office store (like a Staples or an Office Depot) will trigger that 5x Chase Ultimate Rewards bonus.

As an honorable mention, another interesting card would have been the American Express Blue Cash Preferred, which earns you a 6% cash back at supermarkets, but since I don’t currently have it and I’m not in the market for another credit card, I ended up not pursuing it any further.

Buying a Tesla at a Grocery Store

Sorta. A few months ago, my local Safeway (Albertson’s, Vons, etc.) ran a promotion where you were able to get a $500 MasterCard gift card for $10 off. What this meant was that I could get $500 for $495.95, since the $10 off partially offset the activation fee. Picking up a few of these using my cards was a great way to earn multiple thousands of points. Each of these cards would earn me somewhere between 2000 to 3000 points.

Safeway Gift Cards

Each 495.95 purchase on my American Express Gold earned 1,983 membership rewards or the Hilton American Express earned 2,975 Hilton Honors points. I decided to get 25 on my Amex Gold and 25 on my Hilton card. This way I could have both currencies and top off my balances.

Buying a Tesla at an Office Supply Store

Again, sorta. Over the past several months, both OfficeMax and Staples have been running promotions for fee-free gift cards, meaning you can get $200 Visa/MasterCard gift cards for exactly $200, so there’s no additional cost to buying these gift cards.

Staples Gift Cards

Normally, these $200 MasterCards come with a $6.95 fee. Being able to avoid that fee at the same time that I was looking to pay off the loan was happy coincidence.

Since the Ink Cash offers 5 points per dollar at those office supply stores, each card would signify 1000 points to grow my Chase Ultimate Rewards accounts.

Getting a Loan

Well, obviously we can’t just walk into a Tesla dealership with a stack of Mastercard gift cards, so we’ve got to find a way to liquidate those cards. Plastiq will allow you to pay off many banks (and in turn, auto loans) using debit cards for a low 1% fee.

Luckily, there are tons of banks in the world, and getting a car loan (especially for a new Tesla) wasn’t that hard.

Paying my Loan off with Plastiq

Since all of these cards are effectively debit cards, this is when Plastiq comes into play and makes a lot of sense. Most banks have electronic payments set up with Plastiq, so it was an easy set up to link the accounts. Let’s get into the math.

Plastiq Make a Payment

Breaking Down the Math

Gift Card at Grocery Stores                 $495.95

Plastiq Bill Pay Fee                              $4.95

Out Of Pocket Cost                             $0.90

Since Plastiq charges a 1% fee, I sent out $495.05 + the $4.95 fee making each charge exactly $500, wiping out the balance on each card.

Plastiq Payment Review

Plastiq Payment Sent

Gift Card at Office Supply Store                     $200

Plastiq Bill Pay Fee                              $1.98

Out Of Pocket Cost                             $1.98

We did the same for all the $200 cards. For each card I sent out $198.02 and Plastiq charged their fee of $1.98, making the total charge to the card $200.

So, to make this all happen I ended up buying fifty MasterCards at Grocery Stores (which pays off $24,752 off my loan) at a total overall cost of $45. For the remaining $12,238 of the loan, I purchased 62 gift cards at office supply stores at a cost of $124 in total. If you’re good at math -which I’m not- that all added up to $169 out of pocket expenses.

What I Earned

Amex 49,595 MR ($495.95 x 25 cards x 4 points per dollar)

Hilton 74,392 Honors Points ($495.05 x 25 cards x 6 points per dollar)

Chase 62,000 UR ($200 x 62 x 5 points per dollar)

So, whereas I would have only gotten only 2,500 points by just getting my reservation processed through a credit card, by going slightly out of my way, I managed to get 185,987 points and only spend $169 to do so.

Those 75k Hilton points will easily net us a two night stay at a Hilton property and those 111k Chase Ultimate Rewards and American Express Membership Rewards points will convert nicely over to the airlines at a 1:1 ratio, allowing me to book a round trip airline ticket in business class with no problem!

St Regis Maldives

Ah, and before I forget… As you’ll notice in the picture above, all orders placed this year are earning the federal tax credit of $1,875. That’ll be a nice bonus in Q1 of next year when I file our taxes… yet another bonus for buying an awesome car. While it isn’t directly related to buying the car, or even earning miles and points, that’ll be a straight credit back on our taxes at year end, making the “profit” on this even better, and way more than just covering the actual cost of buying the gift cards.

Ps… if you are interested in the Tesla and snagging that tax credit before year end, here’s my referral link – you’ll get 1,000 miles of free supercharging and we will as well – thanks in advance!

Final Thoughts

As I mentioned in the beginning of the article, nothing in our household is purchased without the “can I earn some more miles and points” conversation, even down to the mundane daily shopping. When it came time for a large purchase, however, the process is obviously a little more involved.

While this might not be for everyone, and you might not be in the market to buy a Tesla, you can absolutely use the baseline information shared in this post and apply this to all things in your life.