Amid bitcoin’s raging price gains — and its volatility — holders who have struck it rich are putting the pedal to the metal on high-end transactions.
In an interview with PYMNTS, Blake Pride-Zorn, general manager of Vegas Auto Gallery in Las Vegas, Nevada, said that ultra-luxury autos are a natural fit for spending some of those heady gains as bitcoin trades at around $50,000.
The company made headlines late last year in The Wall Street Journal when the dealer sold two high-end sports cars to a customer who paid the bill — topping a whopping $6 million — in bitcoin.
Granted, it’s not like buying coffee. Still, the transaction (as well as the fact that Vegas Auto Gallery gets a reported 3 percent to 5 percent of its top line from bitcoin-related transactions) trains a spotlight on the increasing use of bitcoin as a means to retail, mainstream use cases.
Well, to the extent that mainstream use cases are buying exotic, three million dollars cars.
As Pride-Zorn told PYMNTS, accepting bitcoin may have been the very lure in closing those high dollar transactions — where he said the headline-grabbing autos were a Bugatti and a Pagani. Those cars are handcrafted and only a few dozen of them are made across the globe.
With a nod toward using BitPay as the bitcoin payment service provider, he said, “it kind of opens up a new door for clients. Many of the customers buying these cars usually have the funds in cash to also pay for these cars. But as soon as they discover that we accept bitcoin, their interest ignites.”
Many of these buyers, he said, already have sizable bitcoin holdings. Vegas Auto, in fact, has been accepting bitcoin as a payments choice for the past few years, but in recent months, with bitcoin’s surge past new (cash-equivalent pricing) milestones, “crypto has been taking off,” said Pride-Zorn.
In terms of the mechanics, the purchase of a million-dollar auto would be fairly simple.
As he explained it, “people may think that every car that someone buys, it’s like an investment that we ride as bitcoin’s price goes up and down. It’s really not that dramatic. It’s whatever the price the car might be online or the price that we negotiate to. We just simply ask for the buyer’s e-mail and we send them an invoice via email through BitPay. We attach the VIN year, make miles, et cetera for the car. And we just click send. On the buyer’s end, they either sign up or they already have an account — and the payment is easy.”
Customers pay a 1 percent surcharge — a processing fee on the transaction. Generally speaking, customers wielding huge windfalls from bitcoin’s surge generally harbor no ill-will toward that processing fee.
The settlement, he said, takes a few days, as with any ACH payment, and is not impacted by any price volatility tied to the crypto.
“The reality is we’ve done multiple transactions. It’s not just like we’ve done one or two. And it’s not just these super unattainable cars,” he said. Increasingly, customers are using bitcoin in an integrated way with traditional payments — opting, for example, to use bitcoin for the down payment, leveraging traditional financing for the rest of the deal.
That “hybrid” transaction may be one way that bitcoin is leveraged to more mainstream use cases and spurs more people to use crypto in a broader range of bigger ticket items.
The upside, he said, is that accepting bitcoin allows the dealership to do business with clients who are already looking to pay with crypto.
“I don’t know if there is any downside in offering to take a type of payment … and it’s been a wonderful publicity generator,” he said.