Learn How to Buy a Car Online From the Comfort of Your Home

Get a new set of wheels without the downsides of visiting a dealership

Small daughter kneeling at home on dining room table helping her mother at laptop order something.
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In the past, the only way to buy a car was by visiting a dealership in person. Fortunately, times have changed, and buying a car online is now quite common. Find out how to purchase a car online from the comfort of your own home—an option that’s especially attractive in 2020 during the pandemic. 

Where Can You Buy a Car Online?

If you’d like to buy a car online, there are many reputable car sellers’ websites that can allow you to do that. Here are a few options to consider:

  • Autotrader: Autotrader sells cars to more than 14 million buyers each month. The website offers new, used, and certified pre-owned vehicles from both dealers and private sellers. You can sort by car type, location, mileage, price, and more to find the perfect car for you. 
  • Carfax: While Carfax is best-known for its vehicle history reports, the company also partners with dealerships across the country to create an online used-car marketplace.  
  • Carvana: Carvana’s website features countless used cars that are all certified and inspected at its reconditioning centers. Once you find a car you like, you can pick it up at a nearby Carvana car vending machine, or have it delivered directly to you. 

What Information Do You Need to Buy?

Before you take the plunge and buy a car online, make sure you understand its value. 

The last thing you want to do is overpay for a vehicle because you didn’t do your research. You can use a car-buying app like Edmunds, Kelley Blue Book, or Cars.com to find out what shoppers in your area are paying for a particular model. 

Some of these apps, like Cars.com, for example, can also give you insight on the car of your choice through reviews. You may also use them to calculate the trade-in value of your current car and estimate your loan payments based on your down payment and credit score. 

Can You Negotiate the Price?

If you find a car you want to buy online, remember that the price you see on your computer, phone, or tablet isn’t set in stone. To ensure you get the best deal possible, it’s a good idea to negotiate. But how do you bargain if you’re not sitting face-to-face with the seller? Pick up the phone, text, or send an email. If you don’t like in-person haggling, you may find phone and email negotiations to be far less intimidating.

While you’re going through the negotiation process, remember that you can’t state a lower price after you make your first offer. Additionally, the seller can’t suggest a higher price after they’ve already given you an initial offer. 

Paying for a Car You Bought Online

Once you negotiate a car’s price and are content with the final figure, it’s time to pay for it. These tips can help you complete that step. 

Trading In Your Vehicle

Some online car-buying websites will allow you to trade in your current vehicle. Carvana, for example, has a sell/trade tool on its site. After you plug in your license plate number or vehicle identification number (VIN) and state, you’ll get an offer. If you accept the offer, Carvana will pick up your car, perform a quick inspection, and write you a check or give you the keys to your new vehicle in exchange. 

Autotrader also offers something similar, known as an instant cash offer. If you get an offer from them, you can visit a participating dealer to claim your cash or trade-in credit. 

Financing or Leasing Your Car

Be sure to shop around at banks, credit unions, online lenders, and leasing companies to get a few different financing or leasing offers. Pay attention to the annual percentage rate, or APR, rather than the monthly payment, as the higher the APR, the more you’ll pay over the life of the loan. 

Once you have a few offers, you can tell the dealer that you’ll go through them for financing as long as they can beat the offers you’ve already received. Dealers are often known for offering higher rates than other auto financing outlets. 

One online buyer, Kyle Kroeger, bought a 2011 Volkswagen Jetta on Autotrader and enjoyed the experience. He opted for financing directly through the dealership. At the time, he said, he had great credit, so he was eligible for an attractive interest rate through them. 

Making the Down Payment

The larger your down payment, the lower your monthly payments will be and faster you’ll be able to pay off your loan. Your down payment will likely be due while you’re at the dealer, before you sign on the dotted line. Kroeger said he made a 40% down payment with his credit card so that he could collect some reward points.

If possible, you’ll want to put down at least 20% of your vehicle’s overall purchase price. This is a general rule of thumb that can save you on your loan payments later. 

Paying Cash

Paying cash rather than financing a vehicle is an option. This can allow you to skip owing interest and forgo monthly payments. You can pay in cash at the dealer’s office or with a cashier’s check, if your car’s value is greater than $10,000. 

How Long Does It Take?

The amount of time it takes to buy a car online depends on the website you use, as well as how long you spend finding the ideal vehicle, comparing your options, and negotiating. With Carvana, for example, you can complete the process in as little as 10 minutes, if you know just what you want and it’s available. 

As soon as you fill out the paperwork, choose a delivery or pickup time, and you should receive your new wheels soon. Keep in mind that even though most states do allow electronic signatures for auto transactions, physical signing is often preferred, as it reduces legal liability. In the era of COVID-19, however, electronic signing is likely more common.

Some companies state that if you opt for delivery and are outside its local market, it will take anywhere from five to 15 business days.

Are There Any Hidden Fees?

When you buy a car online, you may come across hidden fees that increase its overall cost. The most common types of add-on fees include: 

  • Shipping Fees: If you get your car delivered, you’ll likely be on the hook for a shipping fee, which will be based on the vehicle’s current location and where it’s being delivered. 
  • Documentation Fees: You may be required to pay this to cover the processing of your paperwork. 
  • State and Local Taxes: Depending on where you live, you may have to pay state and local sales tax. The more expensive your vehicle is, the more you’ll owe in taxes.
  • State Registration and Licensing Fees: Your location will also determine how much you’ll pay for these fees. 

The Bottom Line

Buying a car online can be fast and convenient. It’s particularly appealing in today’s world, where social distancing and staying at home are the norm amid COVID-19. If you want to buy a car online, don’t rush through the process. Compare all the options at your disposal, negotiate a good price, and read the fine print before making a final purchase decision.

Article Sources

  1. AutoTrader. "About AutoTrader." Accessed Aug. 5, 2020.

  2. Autotrader. "How Much Money Should You Put Down on a Car?" Accessed Aug 5, 2020.

  3. Kelley Blue Book. "Should I Pay Cash for a Car?" Accessed Aug. 5, 2020.

  4. Carvana. "FAQs." Accessed Aug. 5, 2020.