Times are changing around car dealerships, as the Internet drives revolutionary changes in the car-buying process. Instead of spending days traveling from dealer to dealer looking for the car, truck, or SUV they want – and then hours more negotiating a deal on the vehicle – today’s buyers and lessees can visit dozens of dealers without ever leaving home. More and more often, they can complete much of the car-buying process without ever stepping foot outside their house. In some cases, they never have to visit a dealership.
Traditional Car Buying vs. Online Car Buying
Buying a preowned or new car online has many advantages over the traditional process. Few consumers will tell you they enjoy the face-to-face negotiations that still occur on car lots every day. The back-and-forth between car buyers, salespeople, and sales managers is one of the last vestiges of free-wheeling price negotiation, but its days may be numbered.
Fortunately, nearly every step in the car-buying process can be completed online with much less stress. In most cases, though, a final trip to a dealership is still needed to go for a thorough test drive, to sign the paperwork, and to take delivery of the car. Even that part of the process is changing, however, with more dealers willing to bring the car right to your home. Moreover, electronic signatures are beginning to take the place of signing paper documents.
Electric-car builder Tesla has pushed the online car-buying process further than other manufacturers, with nearly the entire purchase process able to be done online. Tesla retailers aren't actual car dealers; they're simply showrooms. You complete the purchase process yourself, either at a kiosk or at your own home. That day’s Tesla price is the price you will pay, as there’s no room for negotiation in their system.
In this guide, we'll look at eight easy steps to follow when buying a car online. We'll mainly be looking at purchasing new or used vehicles online from dealerships in this article. Check out our guide to buying a used car for information about buying from a private seller.
How to Buy a Car Online
- 1) Set a Budget
- 2) Get Preapproved for a Loan
- 3) Find the Right Model
- 4) Check for Car Deals
- 5) Search the Inventory at Multiple Dealers
- 6) Chat Online With Internet Sales Managers
- 7) Take a Test Drive
- 8) Finish Up at the Dealership or Get the Car Delivered
Before you start the online buying process, there are some tasks you need to take care of. First on that list is setting a budget. Without knowing how much you can spend, it’s hard to know what cars and trucks should be on your shopping list. Our car affordability calculator can help you narrow down the price of vehicles you should consider, while our guide to how much you should spend on a car will help you determine a monthly payment that fits your budget.
Your car-buying budget should not be thought of as your monthly payment. Instead, you’ll want to consider the total cost of the car, including the total cost of interest you’ll pay over the term of your loan. You also need to consider all of the other costs of putting a car or truck on the road, including fuel, insurance, maintenance, and parking.
If you still owe money on your current vehicle, that money will need to be paid back. You’ll either have to do it before you buy a new ride, or as part of your financing process. Not every vehicle costs the same to insure, so be sure to think about the cost of insurance for any models you’re considering. Our guide to auto insurance can help you determine the coverages you need.
Smart consumers know never to approach a local dealership, whether in person or online, without having a preapproved financing deal in hand. Not only does getting a preapproved loan help you set a reasonable price range, but it also gives dealers a benchmark deal they must beat if they want to be the ones providing the financing for your new or used car.
It’s easy to get a preapproved financing deal online. You can shop at banks, credit unions, and other lenders, or choose a site that can get you offers from multiple lenders with just one application. Our article on online auto loans shows the pros and cons of online lending – and how to get the best deal.
Get the Car Loan That's Right for You
Apply for financing today, and get up to four offers. Compare your options before visiting the dealership to make sure you get the best rate for you. It's free, quick, and easy.
Some buyers know exactly what car they want, right down to the color and trim, before they even think about starting to shop. Others have no idea what they want and need some guidance to find a vehicle that fits their needs and budget.
Our new car rankings and reviews use the consensus opinion of the nation’s premier automotive journalists, along with quantitative data on predicted reliability and safety to rank nearly every model you can buy. Our used car rankings and reviews add information about cost of ownership into the mix, which can help you find a car that fits your needs and is affordable to own.
If you want to get a closer look at the cars you're considering, go ahead and visit a local dealership to check out the cars, trucks, and SUVs they have available. You may have to be a bit forceful with the salesperson when you say you’re just looking. Remember, you can always leave if you’re not comfortable. Sit in the driver’s seat of cars on your short list and check out their comfort and visibility. Request a test drive if you want to get a feel for the vehicle. However, you’ll want to resist the urge to start talking about making a deal – that will come later.
Not all vehicles are home runs in the automotive marketplace. If sales aren’t meeting an automaker’s expectations, or the vehicle is reaching the end of its product cycle, there may be a money-saving incentive available to boost sales.
Shoppers looking for either new vehicles or certified pre-owned cars should check to see if there are any available on the models they are considering. You can save thousands if you’re able to take advantage of a cash rebate, low-interest financing offer, or subsidized lease deal. Cash back deals (or rebates) effectively lower the car price, while low-interest financing deals reduce or eliminate the interest on a car loan. Lease deals lower the amount due at signing, or make each monthly payment smaller.
You can find the best purchase incentives available on our new car deals page. Lease customers can explore our lease deals page to find offers with low monthly payments, small amounts due at signing, or both. Certified used car shoppers can find special financing deals on our used car deals page.
Not long ago, you needed to hop in your car and drive from dealer to dealer to see what was on their lots. Now, customers can look online to check the inventory of both new and used cars at dealerships far and wide. The U.S. News car finder tool can show you which dealers have the vehicles you’re looking at in stock. The individual dealers’ websites provide even more detail about which vehicles are available.
With new car or truck purchases, you should talk to a local dealer even if the specific model you’re considering is not in their stock. One may be arriving in an upcoming delivery, and dealers frequently trade stock with other dealers when buyers want specific models, colors, or features.
You can save some time by contacting multiple local dealers with one inquiry through the U.S. News Best Price Program. The program connects buyers and lease customers with local dealers offering prenegotiated prices. Buyers save an average of more than $3,000 when they use the Best Price Program.
Search Outside Your Area
Shopping online for a vehicle allows you to search for cars you’re considering in your local neighborhood – or even hundreds of miles away. It’s a good idea to look beyond your area at places and dealerships where you might get a better price. If you’re shopping for a full-size pickup, for example, check at urban dealers where they might not be as popular. Looking for a plug-in hybrid? Check some rural dealers where hybrids may not be in demand, and the dealer may be willing to sell them for less.
The next step in an online vehicle purchase is to email or chat with a dealership's Internet sales department or Internet sales manager. Dealerships frequently assign experienced people to these departments, as they understand the potential sales boost the Internet offers and know that consumers buying online tend to be more knowledgeable and savvy than those walking through the front door. You have a better chance of a no-haggle buying experience on the Internet than you do in a face-to-face purchase at a dealer.
Your initial conversations will be focused on the kind of vehicle you want, whether they have it, or whether they can get it. They may ask you about financing and trade-ins. At this point, it’s fine to be vague and respond that you don’t yet know what you’re planning to do for your auto loan and the sale of your current car. Since you want to keep the deal focused on the price of the car, keeping other components out of the initial conversations is a good idea.
If you are looking at a used car, ask the dealer to provide a copy of its vehicle history report so you can see its accident, repair, title, and registration history. If the dealer won’t provide the report, get the used car’s vehicle identification number (VIN) and order yourself an AutoCheck or Carfax report.
Eliminate Stressful Face-to-Face Negotiations
One of the greatest benefits of buying a car through a dealer’s web sales department is you can eliminate the adversarial face-to-face negotiation process that terrifies many car buyers. Though successfully negotiating a price can save buyers a tremendous amount of money, the idea of face-to-face negotiation turns many people off. Buying online doesn’t automatically make it a no-haggle deal, but it can reduce the stress of being seated across a desk from one another.
Of course, the negotiation process will still happen, but it will occur through email and you’ll have a written copy of everything that was offered, plus time to fully evaluate any offers before you respond. You’re not limited to business hours, and there’s no pressure to get the deal done so you can get home more quickly. When you do start to negotiate, it’s important to remember that a buyer can't suggest a lower price after their first offer, and a seller can’t propose a higher price after their opening offer.
The least important number in the negotiation for a new car is the vehicle's sticker price, or MSRP. Instead, your online research – including the buying insights at the end of many of our new car reviews – will give you an idea of the amount you should pay. In most cases, the purchase price will be a bit higher than you wanted it to be, and the dealer will accept a bit less than they wanted to get out of the sale. That’s how negotiation works.
One great benefit of negotiating online is that most emotions are taken out of the deal. It can be easy to forget that car buying is just a business transaction. While it’s fine that you’re trying for the lowest price you can get, it’s also okay for the dealer to make a reasonable profit. However, when buyers and sellers start doing illegal or unethical things, it’s time to step away and look for a different deal.
It’s a common and accepted practice to take the offer you have, and let other dealers know they need to match or beat the deal if they want you to buy from them.
If all goes well in the online negotiation process, you’ll have a deal in place, so very little needs to be done at the dealership. You’ll just need to get a final appraisal on your trade-in, take a test drive, and sign documents.
You need to take a test drive in the exact vehicle you are purchasing. Not all new cars are perfect from the factory, so you want to drive the exact car you’re buying before you sign the paperwork. Used vehicles need to be thoroughly checked out by an independent mechanic, though this requirement is optional if you’re purchasing a certified used car.
More and more automakers and dealerships have programs where salespeople can bring vehicles to your home for test drives. Hyundai’s Shopper Assurance program is an example of a program with at-home test drives. Getting a test drive at your home provides an excellent opportunity to drive the car on the roads you normally travel. Not all car companies offer at-home test drives, so you may need to visit a dealer for this step.
There are right and wrong ways to test drive a used car. Before you get behind the wheel, read our guide to test driving a used car. Many of the topics discussed in the article also apply to new car test drives.
In most cases, you’ll still have to visit the dealership to complete the sale. You should have a nearly complete deal in hand from your online negotiations, with a set out-the-door sales price that includes all fees and taxes and financing either through your preapproved auto loan offer or the dealership's finance department.
Be sure to ask the dealership what paperwork they need from an outside lender. This ensures that you don’t have to run back and forth between the bank and the auto dealer, or feel compelled to take a dealer’s financing offer.
The dealership will need to do a final appraisal on your trade-in. Even if the amount is lower than you think it’s worth, don’t automatically pull it out of the deal and plan to sell it yourself. If it has a high value, and the state you live in has a high sales tax rate, leaving it in the deal can save you some money by reducing the difference between the trade-in value and the new car price.
The final thing you'll need to do at the dealership is to sign the purchase paperwork. It is crucial that you read each document before you sign to ensure it is accurate and complete. Make sure the papers match the deal you agreed to online and no spaces are left blank. Never sign documents that are incomplete or incorrect, even if you are told they'll be corrected later. It's easy to change the paperwork before your signature is on it, but it's much harder once you've signed.
If a dealership changes any price quotes when you show up in person and refuses to honor the online agreement you came to, politely decline and find another dealer. Your most powerful negotiating tool is your ability to walk away, though few buyers take advantage of it.
While you are signing the paperwork, the dealer will likely try to sell you several add-on products, such as extended warranties, protection products, or gap insurance. Before you purchase any expensive add-ons, it's important to research both the product and the company behind them. Most dealer add-ons are also available from third parties outside of the dealership, where they can be much less expensive. Many lenders and insurance companies sell extended warranties, and you should compare them to the dealer's offer before you buy one. Before purchasing gap insurance from a car dealer, you should check with your auto insurer to see what they offer.