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How to Buy a Car Online

Researching cars online

Buying a car online is the best way to buy a car. Even if you don’t complete every single step from the comfort of your computer or phone, the more the better. From researching your way to the right model to browsing nearby inventory to knowing the right price to pay, the internet is the best place to do most of your car shopping.

And with more dealerships offering delivery to your door, you might only step into a dealership for a test drive. By doing your research and following the steps below, you can make buying a car online a cinch.

How to Buy a Car Online

1) Set a budget

Before you buy a car online, or in any fashion, the very first thing to do is set a budget. Without really understanding what you can afford, it’s hard to choose a car. After all, there no point in looking at luxury cars if you have more of an economy car budget. If you’re financing the car or truck, you should have an idea of what your monthly payment will be. Then you need to consider costs for fuel, insurance, etc. Once you know how much you can spend, start with our New Car Buyer’s Guide to get a general idea of what the cars in different segments cost to give you a better idea where you can start looking. If you’re going to sell your existing car or trade it in for your new car, it’s wise to research your trade-in or sale price for that as well.

2) Do your research

Next you need to ask yourself, What car is right for me? What are my needs? Do I need a large SUV because I have a big family? Do I spend a lot of time on the road for work so my focus is on fuel economy? Do I go camping every weekend, so I want something that has plenty of ground clearance and off-road ability? Once you’re able to assess your priorities and needs, you can then start comparing different makes, models and trim levels by reading reviews online, including comprehensive expert reviews. Tools like Compare Cars allow you to do side-by-side comparisons of up to four cars on everything from mpg to cargo space, horsepower, safety ratings, and warranties.

Manufacturer web sites also offer comprehensive deep dives into different models, often with side-by-side comparisons and price differences. Some also offer 360-degree virtual walkarounds to see how a car looks with different colors, wheels and interior trim. Again, knowledge and preparation are your friends here. The more you know during each stage of the process, the better equipped and more comfortable you’ll be.

3) Shop for a deal

One point that can’t be overstressed is that preparation is your best friend when it comes to buying a car online. The more you know, the better off you are and the smoother the process will be. And a piece of research that people sometimes forget is actually looking for deals. Sometimes a manufacturer will bring a car to market, and for one reason or another, it won’t sell as much as anticipated, which means dealers have a surplus on the lot. Or it’s late in the model year and the dealership is ready to move cars from the previous model year off their lot. This is very good information to know because this means they are ready to make deals, subsidize a lease or sale, or even offer cash back on a purchase.

Explore incentives on the manufacturers’ web sites and don’t forget to put in your zip code. There are many factory-to-dealer incentives based on specific geographic areas and your zip code may open up deals that aren’t available outside your area. Also look for special incentives for recent graduates, military veterans, first responders and even Uber/Lyft drivers.

4) Pre-qualify for a loan

Perhaps the principal reason that car buying is such a stressful and intimidating process is that in the traditional model of a car dealership, once you have picked the car, the next step is dealing with financing, usually in an office where a salesperson is throwing a lot of terms and rates and quotes at you. Because let’s face it, most of us don’t just have $20,000-50,000 lying around the house for a car. We have trade-ins, and we may even have a couple of grand for the down payment, but for most of us, we have to get a loan for the purchase of a new car or truck. Dealerships will always try to make the loan themselves, but frankly, there are other ways to secure a car loan.

There are numerous options for financing, including via a bank or credit union. The bonus of securing a loan online before you talk to a dealership is that if the dealership does want to be the one providing the loan, you can ask them to beat the one you have already found. Using our Car Loans tool can help you determine your qualifications for a particular loan amount. Make sure you talk with many different lenders so you can compare quotes before you get pre-approved.

5) Know your numbers

One of the most important numbers to consider before buying a car online is your credit rating or FICO score. Credit agencies use this number to determine your borrowing risk. The higher the score, the lower the risk. Buyers at the top of the score sometimes referred to as super-prime borrowers, usually get the best rates. If you have a low score, you’re considered a higher credit risk and typically you’ll pay a higher interest rate. Knowing your score and following tips on how to improve your number goes a long way to lower your borrowing costs.

Budgeting to buy a car online

A couple of things we suggest you bear in mind regarding how much to spend and for how long. We strongly recommend that you put down at least 20 percent on the car, and finance for no longer than four or five years. After all, the longer you finance, the more interest you will be paying, and you don’t want to continue paying interest on a car for longer than you own it. We also suggest that you don’t allocate more than 10 percent of your monthly budget to automotive expenses, including financing, insurance, and fuel.

6) Seek out internet sales managers

As more shoppers use tools such as KBB.com to do their car research and start the car shopping process, dealerships have gotten wise to the trend and created internet sales departments. These are people who deal exclusively with customers who find the dealerships and ask questions online rather than in person. Internet sales managers tend to be experienced salespeople who acknowledge that customers who do their research online come more prepared than the average customer simply walking in off the street.

This is a good person to develop a relationship with. You can ask questions about deals and what you’re looking for, and they’ll help steer you toward your best option. At this point, it’s best to be vague about financing but maybe provide your general price target. That’s the advantage of securing financing early or at least being aware of your loan qualifications. This is also a good person to talk to in order to arrange a test drive once you’ve gotten to that stage. That way, when you arrive at the dealership focused on a particular model, you won’t have a salesman giving you added pressure.

And this is the key to preparing and doing as much work online as possible. Grocery stores never include haggling or negotiations over financing. You see a price on a head of lettuce and you pay it. As Americans, we’re not used to the regular hustle and negotiations of sales for most things, so we can get very intimidated when dealing with face-to-face negotiations and questions in someone’s office. Dealing with the internet sales manager from the comfort of your home after you’ve done a lot of the research yourself is one of the best ways to eliminate much of the stress from the car buying process.

Another huge advantage of dealing with the internet sales department when buying a car online is that much of your work, including negotiations and price haggling, will occur online or via e-mail, so you will have written records of everything including sales price, financing offers, and what they will give you for your trade-in if that’s part of the deal.

Working the deal online also eliminates the hassle of doing all this heavy lifting during business hours. And if you are offered another deal elsewhere, you have time to evaluate it. Online negotiation also helps to remove emotions from the deal. That’s important because buying a car is really a business transaction that needs to be made with a clear head.

7) Plan your dealer visit

If you’re considering a particular make and model, you can either call a dealership or, if you’ve already started a relationship with the internet sales manager, you can schedule one. Don’t be intimidated by the sales pitch and explain that you’ve already secured financing, but you would like to see how the car you are considering feels and drives. Also make sure that if you are going through a dealership, you get as close to what you want. If you’re considering the bare-bones model, don’t test-drive the fully loaded highest-priced model. Make sure you know you’re trying exactly what you want.

Another option is to rent a car. Some cars may not be available through traditional rental agencies, but companies like Turo offer you the opportunity to rent someone’s personal car and drive it around for a few days. This gives you a much better opportunity than the typically short test-drive offered by most dealerships. You can drive the car during the day and at night, on roads that are part of your day-to-day life, and really live with it for a few days.

8) Take a test drive

The next part of the search is for some, the most fun: the test-drive. Because as much research as you do online, car buying can be a little like online dating. Just because you both like modern art and walks on the beach doesn’t mean you’re necessarily compatible partners. At this stage, you’ve narrowed your car options down to a few choices, and they have the mpg and the performance or space or ruggedness you require, but you still need to have that actual visceral sensation. After all, we spend a lot of time in our cars, from road trips to grocery shopping and our daily commutes to work.

So, ask the following questions: Does the car feel right? Do you fit comfortably, can you reach the pedals, see out, enjoy the seat and the access to the controls? Do you like the way it looks? Is it comfortable, well laid out? Is it intuitive to play your music and figure out the various touchscreens and controls? How does it handle and brake? What about the sightlines? Can you adjust the seat to your satisfaction?

You might have researched three or four different cars that all seem right, but one still might feel very different from the others. And you won’t know until you actually drive it around. Our How to Test Drive video offers some excellent tips on conducting a test drive, including such pointers as seeing if your favorite beverage cup fits in the cupholder.

9) Shop multiple dealerships

So far, you’ve made excellent progress toward buying a car online. You’ve done thorough research about what you want and need and assessed what you can pay, and even secured a loan for your car, virtually all of it online. The next step is finding the car you want. You’ve figured out what car best suits your needs and desires, checked prices, and even picked not only the make and model but the trim level and optional accessories and color. You’ve done your test drive and decided exactly what car you want. Maybe you’ve even secured some offers from a couple of different internet sales managers. Now you need to figure out where to get the car.

In the past, this was all done in person, where you’d walk onto a lot and talk to a salesman. But now, since you’ve done all your legwork online, you can search multiple dealers for inventory. And if a dealer near you doesn’t have what you’re looking for, maybe there’s another dealer outside your area that does.

The best part of this is that dealer networks work together, so if someone in a different area wants a specific car from a local dealership, this dealership will get the car to them, and vice versa. Their working with each other makes your job easier. You don’t need to start the process over at a whole new dealership.

10) Skip the add-ons

During the negotiating process, it’s inevitable that you’ll be offered all sorts of extended warranties, insurance and other aftermarket accessories such as custom wheels, window tinting as well as fabric and paint protection. You don’t have to buy them. If an extended warranty may give you peace of mind, it’s worth considering but remember to read the fine print and determine ahead of time exactly what components and systems are covered and what your actual out of pocket expenses will be.

As for the other add-ons from the dealer, there’s no rush and you can buy these after you’ve taken delivery. You can shop outside vendors and determine which is the best approach for you.

11) Take delivery!

Now you’ve done all your research. You’ve analyzed your finances, figuring out what you can afford. You’ve thought about your needs, whether you want a compact SUV or a midsize sedan or a rugged off-road pickup truck. You’ve read reviews on KBB.com and checked out trim levels on Web sites and gone in for a test-drive. You’ve negotiated where you’re going to get your car, agreed on financing options and settled on a price for your trade-in. Now it’s all down to signing the paperwork, giving the car an inspection, and taking delivery. You should congratulate yourself for taking the time, doing the research, and finding the perfect car for your needs and budget.

Taking delivery of a new car

Now, not only are dealerships engaging internet sales managers for people who want to do most of the work online, some are even offering delivery of the car to your home or office. For many, that’s one of the key draws to buying a car online. Much of the paperwork is done electronically now. And oftentimes dealerships even accept digital signatures so most of the inspection of documents can be completed online. It’s good business for the dealers, too. If you can conclude more of the transaction online, their salesmen’s time can be spent selling more cars.

12) Get to know your car and your dealer

While it may be convenient to have the car delivered, it might be in your best interest to take delivery at the dealership. This will allow you to thoroughly inspect the car and drive it around in immediate proximity to the dealership. Make sure it drives well and the brakes don’t squeak. It will also allow you to learn the important controls and infotainment features, like connecting your phone. Take the opportunity to learn and use features you may not have encountered during your test drive.

While picking up your car, if your salesperson doesn’t offer it, ask to meet the service manager. Find out where to bring the car and what sort of service hours, shuttle services or car loans are available.

There is one last thing we want to warn you about. It still happens, both at dealerships and with deliveries. The old bait-and-switch. You arrive at the dealership and they say, “Oh, I’m so sorry but there was a screw-up and my manager gave your car to another customer. We do have another one that’s like yours, but with some extra features. Fortunately, we’ll offer it to you for only an extra $100 per month.” Walk away, because that’s a scam. It’s bad business, and if a dealer does that to you, they’re untrustworthy and problems will pop up later when it comes to honoring warranties and service. We’re happy to report the internet has helped make this a disappearing practice, but it’s something to be aware of.

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