Is It Worth Buying a Car Online?
Is it cheaper to buy a car online or is it better to stay at a traditional car dealership? This turns out to be a tricky question, as good deals can be found anyway, but they come with compromises depending on the type of car you want and your willingness to negotiate a lower price. Here’s a look at your options.
Traditional car dealerships versus internet sites
While the percentage of cars sold online is small (just 10-15%, according to Bloomberg ), marketplaces such as Carvana and Vroom have become more viable, “contactless” options for buying cars during the pandemic. However, traditional dealerships have tried to do the same, blurring the line between them somewhat. Both can now get the vehicle to your door, complete paperwork online with ease, provide financing and offer competitive pricing.
Why would you buy a car online
Online shopping is great if you don’t like dealing with sellers, want to easily compare prices, or have a specific car model that is not available from local dealerships, especially if it’s a rare model. It is also a good option if you are already familiar with the car and have already driven it by renting it or taking a test drive at a car dealership. (To reduce the uncertainty of buying a high-value item unnoticed, most online car sellers offer 360-degree videos or digital images of their vehicles to help you make a decision.)
Pricing is also competitive as there are many companies in the online space for selling cars, however the prices you’ll see are pretty much fixed and you probably won’t be able to bargain on the price that a car can. dealership.
For even more savings to be found online, you should look beyond traditional marketplaces and look for deals on secondary reseller markets like Craigslist or Facebook. With these peer-to-peer transactions, you lose an intermediary and deal directly with the seller, which saves on commission costs and other margins. The only catch is that you really need to know what you are doing, as peer-to-peer selling requires market research, vehicle history verification, and documents that include title deeds or sales invoice (site value Penguin has a good overview of buying from a private seller here ). It’s not as scary as it sounds, but you need to do your research so you don’t get mugged.
Finally, when buying from private sellers, you are more likely to finance your purchase with a car loan obtained separately from a bank that may offer lower rates than you would see at a dealership or online site, especially if your credit rating is low. not great. And having a pre-approved bank offer will give you more opportunities to negotiate financing with dealerships.
Why would you buy at a dealership
If you’re looking for a new car, you probably have to go through a traditional auto show, as most states have dealership- friendly franchise rules that entitle them to exclusively sell new car models. However, these dealers work closely with manufacturers and therefore may offer discounts well below the manufacturer’s suggested retail price or suggested retail price , especially if a given model is not for sale (there are always many new models for sale, which keeps things moving) …
Depending on your time and market knowledge, you can negotiate things like the price of the car, the add-ons, and funding to get a really good deal. Finally, if you are not comfortable buying a car without seeing it, showrooms allow you to test the car, so that you know exactly what buying.
Bottom line
There are some trade-offs with both online models and traditional dealer models, but it’s actually best to use a combination of both. Whichever purchase method you choose, the Internet is still your friend – if only because it makes it easy to research market prices for cars using price comparison sites like Edmunds or the Kelley Blue Book . For example, if you buy a new car, you can still do all your research online, test it at a car dealership, and then decide where and how to buy based on the offered price, whether online or through a dealership. The more you research and shop, the more likely you are to get a great deal on your vehicle.