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It depends on the type of experience you prefer. If you enjoy personal communication, dealerships are the way to go. But if you want to handle the purchase from the comfort of home, stick to online.
In the past, car buying meant heading to your local dealership and choosing your next set of wheels from what was available on the lot. But the environment has shifted and now drivers can order vehicles from the comfort of home — and in some cases even get them delivered.
Both buying options come with benefits and drawbacks. Online buying comes with convenience, while dealerships allow for negotiation. Consider which is best for your needs before beginning your shopping process.
Buying a car online vs. dealership
|Advantages||● More vehicle options
● Easier to compare vehicles
● Attentive customer service
|● More flexible prices
● Manufacturer incentives
● Expert advice
|Disadvantages||● No test drive
● No negotiation
● Potential extra fees
|● Larger time commitment
● Harder to walk away
● Fewer vehicle options
|Good for…||The driver who prefers the convenience of shopping from home and wants to avoid any pressure from sales associates.||A driver who thrives in negotiations and prefers the personal connection that comes with working with a dealership.|
|What to look out for||Buying sight unseen can carry added risk, do outside research on models to ensure you’re getting a good vehicle.||Add-ons and marked-up financing can undo all of your hard negotiation. Additional pressure can also push you into a vehicle that doesn’t fit.|
Buying a car online
In the midst of the pandemic, many local dealers began to offer online shopping options. This gave consumers a chance to check out available vehicles in the area before setting out to the lot. While this remains a great option to shop online, it does still require a dealership visit.
Alternatively, other, more seamless shopping routes have gained popularity since local dealers shifted online due to sheer necessity. Online sellers like Carvana, CarMax, Shift and Vroom — to name a few — are enabling drivers to shop, finance and arrange for delivery or pickup all from home.
Advantages to buying a car online
The main perks of buying your next car online come down to ease of purchase and direct online support.
More vehicle options
Local dealerships are restricted to what is available in the area, and with remaining supply chain issues the availability is even slimmer. Buying from an online seller offers a much greater number of cars to shop from. You can also filter for specific models, makes and prices — all without the pressure of a salesperson over your shoulder.
Easier to compare vehicles
With more vehicles available, comparison is the key to choosing the right car. No matter how many notes you take, it is hard to truly compare two vehicles on a dealer lot side by side. Online you can compare the features and accompanying costs for all the vehicles you have your eye on.
Attentive customer service
While shopping from home removes any face-to-face assistance, shopping online still allows for great customer service — depending on the company you work with. Many online sellers, like Carvana, for example, offer a chat function where drivers can ask specific questions throughout the process.
Disadvantages to buying a car online
While buying a car online comes with the benefit and comfort of shopping from home, there are some notable negatives to consider.
No test drive
When shopping online you won’t be able to see the vehicle in person until after you sign on the dotted line. And without any chance to test drive, you could purchase a car that doesn’t feel perfect. So when online car shopping, look for sellers that offer a return — like Carvana’s seven-day return period — so you won’t be stuck with a car you don’t want.
Most online vehicle platforms offer no-haggle prices. Now for those weary of negotiation, this can be a plus. But it also means that you won’t be afforded any wiggle room on the price. When shopping at a traditional dealer it is likely you can cut the price through negotiation, but when shopping online, the price advertised is the price you pay.
Potential extra fees
While fees are unavoidable when it comes to car buying, shopping online tends to carry a few additional costs. If you choose to have your vehicle delivered, for example, you will have to pay an extra fee, upwards of $1,000 or more for marketplaces like Vroom, along with other handling fees that can be mostly avoided when working with a dealer.
Buying a car at a dealership
Heading to your local car dealer is the most obvious choice when it comes time to buy a new or used vehicle. Dealerships cater to specific vehicle brands, prices and vehicle types. But these establishments can carry a negative reputation, so it is wise to consider common dealer tactics before arriving.
Buying a car today also requires some extra consideration due to current high new car prices, caused by supply chain issues and inflation. Which, unfortunately, aren’t expected to reach normal levels until the spring of 2023. With all this said, prepare to spend a bit more money if you are buying a brand new car straight from a dealer.
Advantages to buying a car at a dealership
Taking the traditional route offers drivers the excitement of getting the best deal and the expert guidance of a salesperson.
More flexible prices
While the out-the-door price differs from what you may see advertised on the vehicle window, it is likely that with negotiation skills you can cut down the sticker price. This is not a benefit afforded to those shopping from the comfort of home.
Dealerships sometimes offer buyers promotional finance options or additional rebates provided by manufacturers to sweeten the deal of buying from them. While not every available incentive is equal, many can be used to up your down payment or afford you 0 percent financing.
Nothing compares to the personalized guidance that a sales associate familiar with the industry can provide. This especially rings true if you are exploring new vehicle options like electric. With all the bells and whistles that vehicles now come equipped with, it can be beneficial to have someone to walk you through the process.
Disadvantages to buying a car at a dealership
The time it takes to buy a car can be a large time commitment and cause headaches for cautious buyers, so weigh the downsides of buying from a dealership.
Larger time commitment
When buying online you can close your laptop and have your new vehicle arrive as soon as the next day, but buying at a dealer isn’t usually as seamless. You will have to carve out time to travel to the dealer lot, walk around to explore vehicle options and then sit down with a salesperson. This entire process can be exhausting and sometimes still leave you without your dream car.
Harder to walk away
While salespeople are there to assist you in your car-buying journey, having someone by your side during the whole process can be challenging if you are on the fence. It can also make walking away from a deal especially hard. Unless you are a strict shopper who is prepared to say no, consider the comfort that comes with being able to close the site and “walk away” when shopping online.
Fewer vehicle options
Comparatively, dealerships offer much fewer vehicles than online sellers. Commonly, dealerships sell one specific vehicle brand. So if, for example, you have your sights set on a Nissan but only have a Ford dealer nearby, shopping online is the perfect way to explore more options.
How to get the best deal no matter where you buy
Regardless of where you intend to purchase your next car there are a few cardinal rules to keep in mind when it comes to driving off with the best deal possible.
- Stick to your budget. Cost should be your top priority when shopping, take advantage of a car loan calculator to understand your expected monthly cost. Along with that consider the total cost of ownership — maintenance and insurance included.
- Apply for loan prequalification. Look out for lenders that offer prequalification, this is a great way to lock in expected monthly payments and ensure you can afford your car before signing off.
- Shop the total amount, not the monthly payment. The longer the loan term, the lower your monthly payment may be, but this is not always the best option, as you may pay more interest in the long run.
- Understand your credit score. Your credit serves as the main determinant of your ability to pay off your loan. Understanding it will put you in a better position to know if you are getting fair rates.
- Shop around. Shopping around is not only important when it comes to vehicles but also key to getting the best loan. It is recommended to compare at least three lenders before agreeing to one.
- Use car buying apps. Take advantage of available technology by using apps, on and off the dealer lot. These apps can enable you to compare vehicles and get real-time price estimates.
If you want the best of both worlds, consider talking to your local dealership over email ahead of time. Mention what you’re interested in, your purchase timeline and ask about available incentives.
The bottom line
Getting a new car should be a rewarding, stress-free experience, so the choice of online or dealership comes down to what fits best for your needs. If you prefer the guidance of a trusted sales associate, then take the traditional route. But if the thought of dealerships brings more anxiety than excitement, consider the seamless online process.