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Tips for Car Shopping Online

Shopping online for a car is an accelerating trend changing the purchase process from start to finish. Here are some tips to help you navigate this growing trend.

By Kristina Russo | American Express Credit Intel Freelance Contributor

5 Min Read | November 30, 2020 in Money

 

At-A-Glance

Online car shopping is becoming more and more common.

It’s possible to do the entire purchase process online, or to pick and choose only the parts you wish.

Explore some tips to help you maximize the experience and avoid pitfalls.

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:

  • Save time: Buying a car is usually a major purchase involving large investments of research time as well as money. Online car shopping can be a great time saver, allowing you to research features, read reviews, compare models across manufacturers, and search dealer inventory from near and far, all from the comfort of your couch.
  • Do paperwork from home: Often, you can complete most steps in the purchase process, like financing, paperwork, and even trade-ins, without needing to go to a dealer.
  • Get it “to go”: In many cases, you can even get your car delivered to your driveway.

 

Researching Cars Can be Easier Online

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:

  • Read forums: Read web forums for the car models you’re considering. See what owner’s experiences are, including common issues and solutions.
  • Check out dealer stock: Specific vehicle identification numbers (VIN) are often listed on dealer websites, and you can usually negotiate a better deal for an actual car in inventory than for one you need to order.

 

Negotiating Car Prices Online May be Better than In-Person

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:

  • Extend your range: Online shopping gives you access to dealers that may be too far away for a physical trip just to see what they have. So you can shop around for the best prices from various dealers in an extended region.
  • Remember insurance cost: There can sometimes be large differences in car insurance premiums from model to model – which you can often estimate using online insurance calculators.

 

You Can Trade In Your Old Car Online

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:

  • Think local: Ensure you’re looking at trade-in values locally, since geography is a factor in differing prices.
  • Seek multiple offers: There’s no need to limit the number of online offers you solicit for your trade-in. You’re not obligated to accept any of them.

 

You Can Still ‘Kick the Tires’ 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:

  • Ask about fees: Some dealers charge for at home test drives and delivery.
  • Get an inspection: You don’t want to forgo a mechanic’s inspection when purchasing used cars. Alternatively, consider a certified pre-owned vehicle for the additional warranties.

 

Take Delivery at Home or the Dealer Showroom

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:

  • Prepare to e-pay: You’ll likely want your credit card handy for online deposits and other elements of the transaction, like registration and ancillary fees.
  • Consider add-ons: If you like to customize your ride, consider dealer add-ons like tinted windows, splash guards, or chrome plating, along with the more typical extended warranty, theft protection, or paint and fabric protection. 

 

Contactless Sales Take Online Car Shopping to the Next Level

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.

 

The Takeaway

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.

Kristina Russo

Kristina Russo is a CPA and MBA with over 20 years of business experience in firms of all sizes across several industries, including media and publishing, entertainment, retail, and manufacturing.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

The material made available for you on this website, Credit Intel, is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.