For anyone who still hasn’t got their heads around what a PCP is and how it might work, the idea of using cryptocurrency to pay for a car will be just a step too far.
Crypto has generated multitudes of headlines, often for all the wrong reasons, but does that mean it’s best avoided when buying a car? Or is crypto for cars the first ripples of the wave of change?
Dublin-based Hugo Cars has made its decision. It’s one of the first Irish car dealers to accept crypto – mostly Bitcoin, but other forms of cryptocurrency may be accepted – as payment when purchasing one of its vehicles.
While you might have already formed a mental image of someone handing over a memory stick stuffed with internet coins in return for a large SUV, actually, Hugo Cars isn’t a dealership that’s focused much on luxury models, preferring bread-and-butter family cars, much like any other car trader. So why the switch to crypto?
“Ten per cent of Irish adults own a digital asset like crypto. So I was like – might as well explore it,” Aaron Domoney told The Irish Times. Since graduating, Domoney has gone on to become the head of marketing for Hugo Cars, and it was he who instigated the idea of becoming a crypto-friendly dealership.
“I studied automotive technology and business management in college,” Domoney continued. “I joined Hugo in January, and since then we’ve been trying to look forward, to predict what customers might do in five years, in 10 years, even 20 years. I know a lot of people who have some kind of crypto asset, so we decided it’s worth doing.”
Hugo Cars is using Estonian-based SwapIn, a crypto payments services provider for businesses, to handle any transactions using Bitcoin or other forms of cryptocurrency.
So far, Hugo accepts the most famous form of crypto, but also Ethereum, Tether, and USD Coin. Depending on the size of the payment, SwapIn charges a transaction fee of between 0.8 per cent for payments over €30,000, rising to a fee of 1.35 per cent for payments between €5 and €15,000. There’s also a 0.4 per cent bank transfer fee.
“SwapIn is EU-regulated,” said Domoney. “And the thinking behind it was more about adding a different type of payment processing for a customer, but we had to make sure we had something that was compliant, that didn’t add too much complexity, and wouldn’t change our operation, which it hasn’t. It’s just an extra thing that we can provide for a consumer.”
Red flags
One of the biggest red flags about using crypto to pay for anything, especially a purchase as large as a car, is that its inherent volatility can mean there’s a gap between what you think you’ll pay and what you actually pay.
To get around that, Aaron says that Hugo Cars will guarantee a crypto-to-cash quotation for 30 minutes, enabling you to theoretically make your transfer without worrying about a constantly moving market.
It’s worth remembering, though, that crypto’s reputation for volatility is well-founded, to the point where the Competition and Consumer Protection Commission (CCPC) has issued a warning to Irish crypto.
It said: “You should be aware that cryptocurrency is not considered to be suitable for everyday use. A well-functioning currency has the following three functions: Store of value, Unit of account, and Medium of exchange.
“To be a store of value, a currency should be stable over time. Due to large fluctuations in value, this is not the case for cryptocurrencies.”
It also warned that “some cryptocurrencies have slow transaction speeds and/or high transaction costs. Their volatility also makes it difficult for them to function as a medium of exchange. In general, cryptocurrencies are more likely to be high-risk than a standard currency.”
The Irish Times asked the Society of the Irish Motor Industry (SIMI), for the guidance it gives dealers when it comes to crypto. Its director general, Brian Cooke, said: “As far as we are aware, a large majority of our retailer members do not encourage or accept cryptocurrencies as payment for vehicle transactions.
“As per the Central Bank of Ireland’s view, ‘crypto is not a regulated financial product, it is highly risky and speculative, and it may not be suitable for retail customers.’ In general, cryptocurrencies are not widely used.”
Volkswagen Financial Services, one of the biggest car finance providers in Ireland, was even more succinct in its views: “VW Financial Services does not accept Bitcoin” was the response.
There are further concerns surrounding cryptocurrencies, in relation to tax and anti-money laundering protections.
So how does one square the reputational nature of car sales with cryptocurrency’s more volatile image? “It’s the same as if someone was to use an Iban bank payment to us,” said Domoney. “We’re following the same anti-money-laundering laws as if it were a large cash purchase, and the transactions through SwapIn have to be verified by a passport number and an address. It’s all regulated long before it reaches us, and it took a while to find a provider who was able to fulfil those needs.”
Perhaps those of us looking askance at Bitcoin might be mollified to know that Ferrari has been accepting crypto payments in its European dealer network since 2024.
Of course, anyone using crypto to pay for a car will have to be aware of their own personal tax liability. Revenue treats using payment via crypto as being the same as selling that asset, so if the value has gone up since you invested in it, you’ll have to declare that on your income tax assessment.
This is all a bit theoretical for now, as Domoney confirmed that, at the time of writing, no customer paid for their car with Bitcoin nor any other form of crypto.
“It’s there to gauge interest, and it’s at no cost to us,” says Domoney. “But I’d rather have it there, and have one person use it, than have one person who wants to use it, but can’t.”