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More Americans are buying their cars online through car-buying apps, online retailers and marketplaces. Such online platforms let shoppers complete part, sometimes all, of the car-buying process from the comfort of their homes.
Buying a used car online can help buyers avoid the traditional dealership experience — which can be intimidating and laborious. It also offers a number of advantages over traditional car-shopping, including increased convenience and usually more car options to choose from.
Pros of online car shopping
When you shop through online marketplaces or apps, you can search from a larger pool of available options because you’re not limited to your local dealer's inventory. This increases your chances of finding the right used car for you, based on your needs and budget. Other advantages include:
Convenience. You can search online inventories without the pressure that may come with visiting a physical dealership. This means that you can do your research, set up a loan and have the car shipped to your home all at your own pace.
Valuable comparison tools. Many car-buying apps provide tools that make it easier to compare and filter cars by make, price, features, number of previous owners and more. This can be difficult or impossible to do when you shop at a physical dealership.
Some online platforms like Carvana and CarMax for example, also provide tools like auto loan payment calculators that help shoppers determine how much they can pay each month.
More transparency. At dealerships, some fees aren't revealed until you see the contract. Buying online lets you see everything, and a breakdown of the cost before you commit to the deal.
Cons of online car shopping
A significant disadvantage of buying a car remotely is the inability to take a test drive. While buyers can get an idea of how reliable a car might be through a vehicle history report, they won't be able to feel how the car runs on the road before buying it. Additional disadvantages include:
You can't inspect it. Online used car sellers advertise thorough pre-purchase inspections. But when you purchase a car online, you can typically only see the actual condition of the vehicle you’ve bought once it's shipped to you.
Note that some online retailers and dealers allow buyers to return a car they’ve purchased within a certain time frame and with some conditions. For example, Carvana has a “7-Day Money Back Guarantee” policy that allows you to return or exchange the vehicle within 7 days of purchasing. And CarMax’s “Love Your Car Guarantee” lets buyers take home a car for 24-hours to test-drive it before they purchase it. The policy also gives buyers up to 30 days or 1,500 miles to return their purchased vehicle.
No negotiating. Online sellers typically offer only fixed pricing. This means that you can’t negotiate down the price like you typically can when buying from an in-person dealer or seller.
Online car buying tips
If you decide that buying a used car online makes sense for you, keep the following in mind:
Take a pre-purchase test drive
While you can return the car if you don’t like it, it can be a hassle to do so. Furthermore, you might be deciding between different models and need a test drive to make a decision. Consider borrowing a friend’s car, finding a similar car on a dealer’s lot to test-drive or renting a car for a longer trial.
Arrange an inspection
Since you'll have only a short window to return the car, you should arrange a used-car inspection right away. Begin by evaluating the wear and tear yourself. Then, take the car to a mechanic for a thorough inspection where they can put the vehicle on a lift and check for any leaks or damage to the underside.
Shop for your own loan
Many of these platforms offer their own financing but it’s always a good idea to shop several lenders for a preapproved loan offer. This step will reveal any problems with your credit and give you an idea of what interest rate you'll qualify for, giving you the power to walk away from an unfavorable loan offer from an online car seller.
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