NEWs

Elon Musk isn’t the first to sell cars for bitcoin

Some car dealers say they beat Tesla to the trend, and bitcoin payments are a growing market

Image: REUTERS

Georgia car dealer Christopher Basha was way ahead of Elon Musk in embracing bitcoin as a currency for selling vehicles.

Basha said he learnt about cryptocurrency from a room mate who mined bitcoin. “Someone bought a pizza with bitcoin,” he said. “Buying a car with bitcoin didn’t seem that crazy.”

He began accepting bitcoin payments in 2015, but no customers were interested. “I almost forgot about it,” he said.

In 2017, bitcoin prices surged, and one customer used the cryptocurrency to buy four Kias for a total of more than $150,000, Basha said. Bitcoin payments have been picking up since late in 2020, with prices rallying.

Basha is one of a small group of car dealers who have been accepting bitcoin and other cryptocurrencies from customers well ahead of Tesla’s revelation that it had bought $1.5bn of the cryptocurrency and would soon accept it as a form of payment for cars.

Dealers said accepting cryptocurrency is a good marketing and branding tool, but it is still a niche business. Price volatility and the absence of trusted banks and other financial intermediaries make bitcoin payments a risk for dealers who are not tech savvy.

Basha, the Kia dealer, said he converts bitcoin into cash immediately on receipt because he believes it risky for a company the size of his to hold such a volatile asset. But it does take several minutes to turn bitcoin into dollars on a payment platform, which occasionally leads to losses averaging $300 to $400 on each transaction due to price movements.

Once, he forgot his password to send bitcoin from one account to another to make the dollar conversion after receiving payments from a customer. “I was freaked out ... There is no middleman who’s going to come and save you.”

Pietro Frigerio, a Lamborghini dealer in Irvine, California, said when bitcoin prices surged in 2017, his store sold 20 cars in a month. During the latest rally, though, he has not seen much increase in bitcoin payments. “People are waiting for exchange rates to go up further,” said Frigerio, who also sells other premium luxury sports cars such as Bugatti and McLaren.

He said customers that bought cars with bitcoin have something in common: they are young and have a strong belief in virtual currency.

“More and more, bitcoin is becoming a common payment form,” Lamborghini said in a statement, adding that its dealers are free to decide payment methods.

Peter Saddington, founder of cryptocurrency start-up Emrit, bought a Lamborghini Huracan in 2017 using bitcoin that he bought in 2011 for $115 in a bid to bring attention to his company and cryptocurrency.

“[Tesla’s move] is certainty a PR stunt,” he said. “But Elon is very progressive in his thinking, so it makes sense to me that he would offer a future currency for his company.”

Reuters


Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

X