By Kristina Russo | American Express Credit Intel Freelance Contributor
5 Min Read | November 30, 2020 in Money
Car shopping online can put you into the driver’s seat, both figuratively and literally. Think about it: Shopping for a new or used car online can give you more control over the speed of your search, letting you accelerate if you know exactly what you want or slow down for more thoughtful consideration of multiple options – all without the pressure of a dealer’s showroom.
For these and other reasons, online car shopping is becoming more popular. In fact, one car manufacturer’s online sales recently increased by 40% in just a few months.1 Here are some often cited advantages of online car shopping:
Whether you’re searching for a new or used car, researching options online can be an easy way to find the right car for you. Several websites offer online side-by-side comparisons of vehicle characteristics and safety features, and others aggregate and summarize the results of hundreds of independently published reviews and rankings.2 If you’re beyond browsing and have a short list of cars you’re interested in, online searches you can help you rapidly investigate different makes, models, features, and trim combinations. Most dealer websites include features that let you search their current inventory to find a specific car that meets your criteria.
Tips to help you take your online research further include:
Here are some of the reasons why car buyers seem to be leaning toward more online car shopping:
Access to more information: You can access data from automotive industry websites to help you evaluate pricing for a new or used car and the value of a trade-in. You can usually arm yourself with pricing information that goes beyond Manufacturer Suggested Retail Price (MSRP), like average prices paid (including by location), dealer invoices, and manufacturer incentives. With information like that, online car shoppers can be savvy negotiators.
No in-person sales pressure: Negotiating through email provides you with time and composure to hammer out the best deal for you.
Written records: Email negotiations also provide a written record of any offers, which can be helpful when negotiating with multiple sellers.
Doing the math: Once you’ve established the purchase price of a vehicle, online calculators can help you translate it to a monthly payment including any fees and taxes.
Pricing considerations when car shopping online include:
Trading in a car has also become easier as part of the online shopping experience, with some dealers forgoing an in-person inspection. Often, you can get a trade-in quote by providing a VIN, photos, and odometer readings.3 To optimize trade-in values when online car shopping:
Most people still want to actually feel and drive a car before purchasing. To help capitalize on the increased demand for online shopping, car retailers have started offering more creative ways to test drive. Recently, many dealers have started programs where cars are brought to a customer’s home or workplace for a test drive. Beyond the convenience, this allows you to test drive on familiar roads where you’ll be driving often. Test drive tips include:
Shopping for your car online can help the delivery process go more smoothly, whether you go to the dealer showroom or have the car come to you. Likely, most of the details of your transaction are included in the email negotiations, making the paperwork part easier and less prone to surprises. Additionally, electronic signatures are becoming more accepted alternatives to signing paper documents. Tips to help you close the deal online include:
In both the new and used car markets, a few sellers have taken online car shopping to the next level. Using interactive technology rather than a live sales associate, they let customers locate their desired car, agree to a price, apply for financing, do a trade-in, and arrange at-home delivery. And if you’re dissatisfied with your purchase, you can return the car within seven days.4 Contactless, self-service kiosks and car vending machines are revolutionizing the traditional car buying experience and pushing the online sales model into new territory.
Shopping online for a car is an accelerating trend. Fueled by easy access to data, car shopping online can help you select the right car, at a fair price, in a convenient way. As with traditional car buying, there are some expert recommended tips you may want to be aware of. The trend will likely continue to evolve and grow.
1 “The Pandemic has Pushed Car Buying Online. It’s Expected to Stick,” The Wall Street Journal
2 “Rankings Driven by Research” U.S. News & World Report
4 “How Carvana is Disrupting the Used Car Industry,” The Motley Fool