8 Smart Tips for Buying a Car Online, According to Industry Experts

published Mar 27, 2022
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You buy your clothes online, your groceries, your furniture, your cat litterwhy not your car? From Carvana to Vroom, online car marketplaces make it seem easy to type in “Toyota Highlander” and have a new car at your doorstep with just a few clicks. Plus, there’s none of that car salesperson pressure, back and forth haggling, and chasing down the exact right model. 

Is it really as good as it sounds?

The answer: maybe. “Buying a car online can save you time and money, and it can reduce the stress of negotiating the price of your next car,” says Lauren Fix, founder of Car Coach Reports.

But it’s also easy to get wrapped up in a scam, find yourself with a lemon, or end up stuck with a car that looked better online. The key is to do your research, starting with these eight tips from those who would know — experts in the online car industry.

Go to a reputable source.

Richard Reina, Product Training director at CARiD.com, advises, “Stick to reputable shopping channels if you can. In addition to third-party resellers (Carvana, Vroom, etc.), dealerships have upped their online shopping experience since 2020, when COVID lockdowns eliminated traditional buying options.” He says that if you do decide to go through a private online seller, take extra precautions to review photos and engage with the seller. 

Matt Smith, deputy editor of CarGurus, echoes this sentiment with one caveat: “Dealerships often provide more support in terms of paperwork and financing, while private sellers are typically more motivated to sell and may offer lower prices. Shoppers working with private sellers will want to take a few precautions: Make sure the vehicle’s title is on hand, meet to test drive and finalize the transaction in a public place (police stations often have designated spaces for this), and consider handling payment through an escrow service.”

Determine your budget.

Before you begin shopping, determine what you can afford. If possible, Fix recommends, “Make at least a 20 percent down payment and spend no more than 10 percent of your monthly budget for all vehicle expenses.” She explains monthly costs could include fuel, interest, and insurance.

(Tip: When you’re shopping online, it’s easy to go down the slippery slope of upping your price filters. You may not even want to look at that luxury model if you know an economy car is a better fit for your budget!)

Sort out your loan beforehand.

Getting pre-approved by a lender, like a credit union or online bank, will give you an idea of what to expect in the buying process — even if you end up getting a better rate through the online retailer. Fix says, “When you’ve agreed on a price, show the online dealer your financing and ask if they can beat that rate.”

Know the market value.

If you plan on trading in your old ride for a new one, take a few minutes to look your car up on Kelley Blue Book so you know the maximum value of your trade-in.

“Plenty of sites will buy your trade, like Vroom, CarMax, and Carvana to name a few,” Fix says. She recommends using these offers against each other to get the best value for your trade.

Don’t get your hopes up on haggling (right now).

Fix has bad news for those who are eager to flex their haggling muscles in the car buying process. She says, “In today’s new and used car shortage, it’s hard to negotiate the price and incentives barely exist.” However, she explains that you can negotiate dealer fees and add-ons.

In this hot car market, Sherin Sherin, Consumer Advocate at Bumper.com, advises going in with clear eyes about comp pricing for the model year, make, color, and other key features. She says, “You can determine what you should expect to pay by doing your research before you begin any negotiations. This is just as important online as it is in person.”

Review return policies and warranties.

If you’re buying a car sight unseen, make sure there are protections in place. Smith recommends investing in a pre-purchase inspection, and confirming that you’re able to return the car after a trial period, even if it was delivered from outside of your local area.

Look out for scammers.

“Be wary of any [listings] that don’t include photos. Scams to look out for when shopping for cars online include fraudulent mileage records, hidden collision damage, and even salvage titles (if the car was declared a total loss by an insurance company),” says Reina. 

He advises uncovering the full history of any used car — if a seller isn’t willing to provide it, that’s a red flag. “You can also ask for the vehicle identification number (VIN) and perform a check of CarFax or AutoCheck yourself to verify the seller’s claims,” he adds.

Additionally, Sherin recommends using only secure and traceable payments. She says, “Never use wire transfers, prepaid credit cards or other non-traditional payment methods. Cash-only transactions, upfront payments and handshake deals should also be avoided as a precaution, just in case the seller is dishonest.”

Take a test drive.

Buying online can be convenient, but nothing beats the feel of the steering wheel in your hands. Don’t sign on the dotted line until you’ve actually taken a spin around the block. Sherin says, “Most dealers offer test drives upon delivery, so if anything is wrong, you can cancel. You can go any route you like, but never skip the test drive.”