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How to buy a car online in 6 steps

While it’s easier than you might think, you can’t always haggle for a better price.

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Today, nearly every step in the car-buying process can be completed online — from negotiating a price to signing the documents. But to make sure the transaction goes smoothly, there are a few things to keep in mind as you shop.

Buying a car during the coronavirus outbreak

As a result of the coronavirus outbreak and shelter-at-home orders, US auto production essentially shut down in April. But if you do need to buy a car, dealerships across the country remain open with measures in place to ensure your health and safety. If you have concerns, reach out to customer service to learn more about what they’re doing to keep their customers safe.

Step 1: Research makes and models

When buying a new or used car online, you may want to visit manufacturers’ websites to get an idea of features and options, color availability, safety features and prices of different makes and models.

Most manufacturer’s websites let you enter your ZIP code for a list of vehicles that are available at dealerships in your area.

Step 2: Browse inventories online

Once you’ve narrowed down your vehicle options, you can search online for your vehicle on a local dealership website or try out CarMax or Carvana. The process is similar in most cases:

  1. Create a free account and shop by type, brand or price.
  2. Narrow down your selection by make, model, year, interior and exterior color, and more. 
  3. If buying used, you might see a car owner’s history, mileage and warranty information.
  4. Get an estimate for your trade-in.
  5. Choose from the list of available vehicles.
  6. Get preapproved — if the option is available.

Step 3: Take it for a test drive

Most people like to test drive a car prior to signing and having it delivered. This is the time to feel out how it handles, look over features and identify deal breakers that might pop up.

Take notes of the following before and after your test drive:

  • The exterior. Examine the exterior of the car for any blemishes or dings — this is especially important if buying a used vehicle.
  • Interior features. Check out the various interior features to make sure the car has what you want and that everything works.
  • Problems. Check for exhaust smells or noises, or any warning lights or gauges that don’t work.
  • How it drives. Test how it accelerates, brakes and steers.
  • Vehicle inspection. If possible, have the vehicle inspected locally by a mechanic.

Vroom, CarMax and Cavana will let you return your vehicle under certain circumstances if you didn’t get a chance to test drive it before buying.

Additionally, as the coronavirus outbreak has limited how we interact with people, dealerships are taking added precautions to protect against the spread of the virus, which might include pausing test drives for the time being.

Step 4: Compare financing options

When buying or leasing a car, you want the best deal you can get for your price range. Shopping around and comparing your financing options will go a long way in determining how much car you can afford.

Here are a few places to begin your search for the best car loan offer:

Traditional bank loan

Most banks offer auto loans or personal loans you can use to purchase a new or used vehicle. A bank will likely do a hard credit pull to check out your credit history. Typically, only applicants with good credit will qualify. Although banks usually offer competitive interest rates, they often also charge fees. 

Credit union

Many credit unions offer financing with lower rates than banks. They also often have less-stringent credit requirements. But you’ll likely need to join to qualify, which can add time to the process of getting financing if you don’t already have a banking relationship with the particular credit union.

Online lenders

With an online lender, you can often get better rates than at a bank or credit union, especially if you have good credit. Some online lenders will also work with borrowers with poor credit.

If you’re not sure where to start, online marketplaces help you compare offers from multiple lenders by filling out just one online form. But interest rates vary by lender, and you may pay extra fees.

Leasing

Leasing can typically get you into a car with a lower down payment and lower monthly payments. With most leases, you'll have the option of returning or purchasing the vehicle when the lease is up. However, you’re responsible for maintenance costs and will have limits on how much mileage you can rack up — and usually have to pay extra fees if you go over.

Dealership financing

Most auto dealers can arrange financing for you or provide their own financing. However, many mark up the initial interest rate offered by the financial institution they’re working with, which can add to the total cost of your loan.

Coronavirus online car-buying assistance

The coronavirus outbreak has prompted deals, assistance programs and financing options for new and used car buyers. For instance, Carvana is offering no payments for up to three months and touchless delivery. 

CarMax has a new program that started on April 14, 2020, called curbside pickup. When you’re ready to pick up your car or have it delivered to your house, you call and they will meet you — while maintaining six feet or more of distance.

Find a car loan to apply for today

Data indicated here is updated regularly

Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
No minimum credit score
3.9% – 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
car.Loan.com Car Loans
300
Varies by network lender
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
SuperMoney Auto Purchase Loans Marketplace
600
Varies by lender
Varies by lender
Fair to excellent credit, an income source, US citizen or permanent resident, 18+ years old
Find an offer and get rates from competing lenders without affecting your credit score.
CarsDirect auto loans
Varies by network lender
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Auto Credit Express Car Loans
300
Varies by network lender
Varies by lender
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
Get connected with an auto lender near you, even if you have bad credit.
Monevo Auto Loans
500
3.99% to 35.99%
3 months to 12 years
Credit score of 500+, legal US resident and ages 18+.
Quickly compare multiple online lenders with competitive rates depending on your credit.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
LendingTree
Good to excellent credit
Starting at 3.09%
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
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Compare up to 4 providers

Step 5: Negotiate the best price

Not all online car dealers negotiate. For example, CarMax and Carvana won’t let you negotiate a better price. And some dealerships won’t haggle unless you come into the showroom.

But if you are able to negotiate, prepare yourself by following these tips:

  1. Do your research. Know which car you want to buy, how much you have in your budget and the estimated cost of the vehicle based on your research.
  2. Get preapproved. When you’re preapproved for a certain dollar amount, the dealership, online dealer or marketplace knows what benchmark to meet or beat.
  3. Shop for deals. Dealerships and automakers offer special incentive programs at different times of the year. 
  4. Understand hidden costs. Brick-and-mortar and online dealerships will often bundle the cost of a vehicle, warranties and financing with add-ons and the trade-in value of your vehicle. 
  5. Don’t lose focus. It’s easy to focus on the sticker price of a car, but don't forget you can often negotiate your trade-in, interest rate and other products like your extended warranty or tinted windows.
  6. Be prepared. Don’t like what you see? Walk away. A different online car dealer may offer you a better deal or financing options. 

Not the best negotiator? Consider using a service likeTruecar, which will negotiate with dealers on your behalf.

Step 6: Arrange delivery

Most online dealers offer delivery, but some come with restrictions. Here’s how delivery works with three popular online car-buying services:

  • Carvana. Offers free delivery, but it's limited to locations on the East Coast and in the South and Midwest. Customers outside of the free delivery areas can fly to a Carvana location, and the company will cover $200 of the airfare. In some instances, Carvana will deliver your vehicle at an additional cost. 
  • CarMax. Offers delivery within a 60-mile radius of its stores. But it’s not available in all states or at all locations. If you choose to have store-to-store shipping, CarMax charges additional transfer fees that you have to pay in advance before the car is delivered. 
  • Vroom. With this service, your vehicle should arrive within 10 to 14 days of signing your contract and making your down payment. You’ll get an email with an estimated date of delivery once your vehicle is on its way.

If you buy your vehicle online from a dealership, once delivered, you usually have time to take the vehicle on a short test drive. And if you have a trade-in, this is usually the time they do a final trade inspection. 

That’s all assuming the dealership offers delivery, and not all do. If you’re having your vehicle delivered from outside of a local market, a third-party transport company is often used.

Can I return a car I just bought online? 

Most return policies are in the contract you sign when you purchase your vehicle. But it doesn’t hurt to ask for a Carfax report or have your personal mechanic inspect the vehicle before you buy. 

You might have better luck returning your vehicle if it's used. But even that depends on the state where you live and the individual dealership’s policies. 

Here’s how it breaks down with three popular car-buying services:

  • CarMax. Offers a 90-day or 4,000-mile return policy, whichever comes first. 
  • Vroom. You have seven days or 250 miles, whichever comes first, to decide if your new vehicle is the one. 
  • Carvana. Comes with a 100-day, 4,189-mile guarantee and a seven-day money-back guarantee.

Bottom line

Buying a car online is a relatively easy process that allows you to search multiple makes and models from the comfort of your home. But you may not be able to take a test drive until the car is delivered, and you can’t always negotiate a better price. 

Learn more by reading our car-buying guide. And when you’re ready to get behind the wheel, compare your car loan options

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