Should you buy a car online or at a dealership? |
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Buying a car online vs. in person

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Looking for your next ride and wondering about buying online or in person? We’ve got the information to help.

Part of buying a new car is deciding where to shop. Though many resign to visiting a dealership to work with salespeople and test drive potential cars, online car marketplaces are another popular way to buy your next car. Both have benefits and drawbacks, and depending on your buying style, you might find one that works better for your needs.

Our guide helps walk you through both situations so you can make the best decision for you.

The differences between buying online and at a dealership

Whether you purchase your car online or at the dealership, you’ll still need to test drive the car and negotiate your price. But the big difference will be your shopping experience. Take a look at the pros and cons of shopping online verses at a dealership.

  • Take your time. You can do your research, comparisons and bargain hunting at your own pace without having to visit a high-pressure dealership.
  • Avoid professional hagglers online. Car dealers are professional hagglers, but people making a sale online aren’t necessarily out to make a killing on a sale. You could be making a deal with someone who knows just as much or as little about cars as you do.
  • Compare prices easily. You can search for other cars that are the same make and model and even find pre-approval for a loan with an online lender.
  • It takes longer. When you shop online, you can’t drive away in your new ride. Online sales require a meeting time and back-and-forth messaging the potential seller.
  • The seller is a stranger. Car dealers also sell online, and you often don’t know who the seller is until you’re ready to buy.
  • Price comparisons may not be accurate. You can’t really see what kind of condition a car is in if you just have a picture and a short description. This makes it harder to accurately compare prices online.
  • You’ll have more options. You can get a wide range of extra features at car dealers, many of which you can have installed right on the lot.
  • Find quick answers to your questions. Whatever might be said about car salespeople, they are experts in their business. If you have questions about a car or loan, you can get answers on the spot.
  • Dealership financing. Dealers have financing options that you can apply for when you get your car. This cuts out the need to search for a loan elsewhere.
  • Overpriced and unnecessary options. Extras offered at the dealership come at a cost, and odds are you either don’t need them at all or they’re a lot cheaper to get elsewhere.
  • Limited time to compare. A salesperson wants to make a sale as quickly as possible. This leaves you little time to take notes and compare vehicles.
  • High-pressure sales. This is one of the biggest drawbacks of a dealership. If you can’t handle sales tactics, you might walk away with something you don’t want.

The differences between shopping for a car online versus in person balance out. You may find the best option finding the middle ground: Take the time to compare cars and financing online, then visit a dealership with an exact plan to face a sales pitches with confidence.

Reasons to go online first

Buying your next car at a dealership may be efficient and let you ask all your questions, but you could get a better deal if you’ve done your research before showing up. By going online first, you’ll have access to extra benefits to:

  • Compare prices. Look for cars of same make, model and year you’re looking for to compare prices online. This could give you more bargaining power at the dealership.
  • Research thoroughly. Find out how much it usually costs to buy the car you want, considering insurance, registration and taxes, and then learn what to look for in a used car or how to pay less for a new car.
  • Filter your search. Narrow down your search by selecting a specific color, price range, number of miles and brand.
  • Find more options. When buying from a dealership, your choices are limited to whatever is available on that lot. You have more choices when you go online and will still be able to view the car in person before you buy.

Where can you buy a car online?

The benefits of shopping online can vary based on the website you’re using. Each one is different, and one might suit your needs more than another. Here are some sites you can visit to start your comparisons.

  • TrueCar. TrueCar lists prices others have paid for similar cars so customers know you’re getting a fair price for your next vehicle.
  • works with thousands of dealers to give you an easy way to find the car you want when you’re ready.
  • Carvana. Carvana not only allows users to inspect the car with a photo model, but also have access to a free history report before you buy.

There are plenty of other websites geared to help you buy a new or used cars. You can buy directly from a brand’s website or visit sites like eBay and Craigslist to find private sales. Take your time browsing online offers so you can find the best deal around.

Why you should visit a dealer first

If you don’t like online research and would prefer to talk to someone about your options, making a trip to a car dealership or two can help you compare your options. By going to a dealer you could benefits by:

  • Knowing the prices. An Internet search may only return average prices for the vehicle you’re interested in. By visiting a dealership, you can see the actual sticker price of the vehicle along with its features.
  • Talking to an expert. Salespeople know their business, and they should be able to help you find a vehicle in their inventory that suits your needs.
  • Comparing two or more dealers. Although it might take more time, you’ll be better served to see the prices offered by a handful of dealers for equivalent vehicles.
  • Test drive different options. Even if you do some shopping online, it doesn’t mean you know what you want. Visiting a dealer means you can test drive your options and determine a car that’s comfortable for you.

In addition to shopping at a dealership, you’ll be able to start building a relationship. If you plan on buying multiple cars, having a dealership you trust with people you can count on can help you get better deals in the years to come.

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Dealership financing vs. online financing

Financing at a dealership

Dealership financing is convenient, but that doesn’t mean you’ll be getting the best deal. In fact, there is often a big price gap between dealer financing and car loans.

A good way to get a bargain with dealership financing is to bring your other loan offers to the negotiating table. If you’re able to show that a another lender is willing to offer you a lower interest rate with better terms, you’ll have the upper hand. If the dealer wants to make the sale, he’ll either need to match the price or offer you a lower rate.

In many cases, especially if you don’t have the best credit, dealership financing won’t be your best option.

Going online

The trick to making a great deal is getting preapproved for a car loan. With preapproval in your pocket, you can simply tell the dealer that you have a better loan offer and ask if they’re willing to match the terms. Before you start on the preapproval process, you’ll want to know what type of car you’re interested in and be prepared to submit multiple online applications to different lenders.

You may also want to consider looking into the differences between car loans and personal loans. Each offers its own benefits and, much like qualifying for preapproval, can be brought to the dealer when you’re ready to buy a car. This can be useful if dealer financing doesn’t include taxes or extra insurance you may need to cover your new car.

If you don’t plan on visiting a dealership, then an online car loan can help you finance a private sale.

Compare a range of car loans you can apply for online

Rates last updated October 23rd, 2018

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Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
Name Product Product Description Minimum Credit Score Term of Loan Requirements Car Loans
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Auto Credit Express Car Loans
Get connected with an auto lender near you, even if you have bad credit.
Typically 3 to 6 years
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.
LendingClub Auto Refinancing
Lower your monthly car payments and save on interest through a fast and easy online application process.
Fair or poor credit
Minimum of 2 years
Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
MotoRefi Car Loan Refinancing
A car loan connection service for borrowers looking to refinance.
1–6 years
Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles. Car Loans
Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.
24 to 84 months
Must have a Social Security number; make $24,000+/year; have no open bankruptcies.
LendingTree Auto Loans
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
Typically 1 to 7 years
Must be a US citizen and 18+ years old. Must have good to excellent credit.
Capital One Auto Financing
You could qualify for a car loan of up to 40000, but not all dealers accept this bank's financing.
Good to excellent credit
36 to 72 months
Valid street address; existing Capital One accounts in good standing. Car must be a 2006 model or newer with less than 120,000 miles.

Compare up to 4 providers

Bottom line

There are benefits buying your car online or at a dealership. The easiest way to find a good deal is to compare both and keep your options open. Trying to find a median between your two options should help negate some of the drawbacks.

Frequently asked questions

Image source: Shutterstock

Elizabeth Barry

Elizabeth is an editor for specialising in personal finance and fintech. She enjoys reading PDSs so you don’t have to.

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