The Best Way to Buy a New or Used Car Online from the Experts

The COVID-19 pandemic has changed a lot of things in our lives, and that includes the process of buying a car. The best way to buy a car is not what it used to be.

At Addition Financial, we’ve talked to many of our members about buying cars during the pandemic. Many of them want to know:

“What is the best way to buy a new car online?”

It wasn’t that long ago that buying a car online would have been unthinkable, but today, it has become an increasingly common way for people to shop. We asked some of our financial experts to delve into the online car buying process. Here’s what we learned.

Prioritize Your Automotive Needs

The first step to buying a car online is knowing what you want. We all have different needs and you’ll need to figure out what you're looking for before you start to shop.

Tantania Akeela, the digital marketing manager at WapCar, offers this advice about choosing a car online:

  • Determine what you need to buy
  • Do not overspend – stick to your budget
  • The most expensive is not necessarily the best

You might need a car that will accommodate a growing family – or a growing collection of camping equipment. You might want a car that will impress your clients, or one that won’t cost you an arm and a leg. We can’t tell you what to prioritize. What we can tell you is that your priorities should guide you through the online car-buying process.

Embrace Online Research

Next, you’ll need to narrow your choices. There are thousands of new and used car models to consider and you can’t truly begin the search for your ideal car without winnowing your choices down to a few models that have what you need.

Your best bet is to search based on the priorities you identified in the first step. For example, you might search for “best SUV for families” or “top cars for fuel efficiency.” The vehicles that overlap two or more of your priorities are worth a closer look

Chris Chevalier, Founder of Clever Consumer, says:

“There are too many vehicles for sale at any given time for there to be just one good option for you. Do enough shopping that you have another vehicle you would be happy with. That gives you the power to walk away if negotiations aren't going your way.”

In other words, cast a wide net and keep an open mind.

Compare Costs

After you arrive at a list of potential makes and models that suit your needs, it’s time to do some comparison shopping.

There are a lot of websites where you can buy cars online. Tantania recommends checking the prices of the cars you’re considering on multiple websites. That’s the best way to make sure you don’t overpay.

Depending on your needs, you may also want to consider a new-to-you (used) car. Rebecca Hunter of The Loaded Pig suggests:

“The majority of new cars depreciate a significant amount the moment they are driven off the lot. If you're in the market for a car, take some time to compare new and used cars. You may be able to find the model you are looking for used with low mileage to save yourself some money. If you look at a car like an investment, you want to maximize the resale value later on and one way to do this is by paying less for the vehicle.”

If you are considering a used vehicle, then you should compare the listed prices with the Kelley Blue Book value. When you get to the point of negotiating a price, you’ll be armed with the information you need to get the best deal possible for the car you want.

Apply for Loan Pre-Approval

Before you ask for a test drive or begin negotiations, we recommend getting pre-approved for an auto loan. Pre-approval gives you the best chance of getting the car you want because you can go into your negotiation in a position of strength.

Another benefit of getting pre-approved is that you won’t be put in a position where you need to rely on a dealership loan. Mason Miranda, a credit industry specialist with Credit Card Insider, talked to us about dealer financing. He said:

“Many dealerships are starting to offer their own in-house financing, instead of having outside banks or lenders do it for them. Oftentimes, these financing options can have extremely high interest rates, so make sure to do your homework beforehand. The lower the interest rate, the less money you pay in the long run, and the better your finances turn out.”

Credit unions tend to offer the most advantageous rates for auto loans. Becoming a member can help you avoid high interest rates.

Arrange for a Test Drive

If you’re wondering how to safely test drive a car during a pandemic, you’re not alone. Fortunately, car dealers have risen to the occasion with touchless test drives.

To test drive a car, you’ll need to find a dealer who’s prepared to put your safety first. Touchless test drives work like this:

  • A concierge from the dealership drives the car to your home.
  • They wipe down the car with disinfectant, so you can drive it safely.
  • You take the test drive alone.
  • You return the car to the concierge, who will disinfect it again before taking it back to the dealership.

If you are negotiating with a private buyer, you’ll need to see if they’re willing to arrange a touchless test drive. Many private sellers will be willing to accommodate your needs for your safety and theirs.

Negotiate a Price

Negotiation is one of the parts of buying a car that can be a little scary, especially for first-time buyers. We don’t negotiate for most of the things we buy, after all; nobody walks into a supermarket and haggles over the price of milk.

That said, both dealers and private buyers expect to negotiate the price of a car. The research phase plays a big role in negotiations. Rebecca also told us:

“One of the best ways to prepare for a negotiation is to do thorough research on the value of the car and decide on your ideal price and walk away price before beginning the negotiation.”

Your best bet is to say as little as possible leading up to the negotiation. You don’t want to give away too much information, particularly information that might keep you from bargaining from a position of strength.

Lauren Fix, The Car Coach, suggests avoiding the following phrases:

  • “I love this car.”
  • “I need a car today.”
  • “I don’t know anything about cars.”
  • “My credit isn’t that good.”
  • “I’m paying cash.”

Some of these statements might be fine to say at the right point in a negotiation. For example, if you’re paying cash, you’ll need to say so eventually. But, when you’re negotiating with a dealer, you may want to wait. The reason is that dealers will sometimes lower the price of a car if they think they can make up the difference in financing fees.

Several of our experts, including Chris, Lauren and Rebecca, talked about the need to know your “walk away” price before you start negotiations. It can help to have more than one car you’re interested in – and to keep in mind that when it comes to cars, there’s no such thing as “the one.”

Closing on the Sale

The final step of buying a car is, of course, the paperwork and closing. Just as touchless test drivers are now available, many dealerships and some private sellers are offering touchless closings, which can be done using an easily-disinfected tablet. You may want to ask about closing options before you get into negotiations, particularly if you’re in a high-risk group.

When a touchless closing isn’t an option, there are things you can do to keep yourself and your family safe. Tantania says you should make sure to follow social distancing and disinfection guidelines, including:

  • Avoid handshakes.
  • Stay at least 6 feet away from people during the closing.
  • Wear a mask and request others to wear them, too.
  • Wash your hands frequently.
  • Use hand sanitizer any time you touch a surface.

Taking these precautions will help you stay safe. You should also follow these general guidelines for a closing:

  • Read all documents completely and make sure you understand them.
  • Ask for clarification on anything you don’t understand.
  • Get copies of all signed documents.
  • Make sure you understand any warranties or service agreements.

It’s possible to do a closing without having any direct physical contact with anybody, and most dealerships are offering safe and low-contact closing options to accommodate their customers.

Buying a car online may eventually become the new normal. The guidance we’ve included here will help you research, drive, negotiate and buy your next car, all while keeping safe and adhering to social distancing guidelines.

Need help buying your next car? Click here to learn about Addition Financial’s flexible auto loans now!

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The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.


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