Is Buying a Car Online a Good Idea?

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Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - August 13, 2020

People often feel intimidated when they walk into a dealership. Some people thrive on negotiating the right price – others hate it! Nevertheless, COVID-19 has moved the evolution of online car buying along, and dealers, automakers, and some other companies are joining the revolution.

Paradigm Shift: Buying Cars Online

Nowadays, you can buy pretty much anything online. With the recent coronavirus pandemic, many people have started considering the possibility of buying a vehicle online to avoid person-to-person contact.

This sounds great in theory, but buying a car completely online is quite the jump from the “traditional” way of doing it. What about test driving it? Can you return the vehicle if you don’t like it? The answer to these questions, like many things, depends on the car dealer that you choose to work with.

The Harris Poll conducted a study in June 2020 and found that 93% of the respondents had some concerns about buying a vehicle completely online. However, over one-third of the participants agreed that there was never a reason to visit a physical dealership again, now that online buying options are available. While many car dealers were shifting to online transactions as a response to the COVID-19 pandemic, this methodology may end up sticking around long after the virus is gone.

While the convenience of shopping online to buy your next vehicle is nice, it’s still a big purchase, and doing it completely online can feel off-kilter. While everyone’s preferences are different when it comes to what’s important to their car buying experience, we cover some pros of cons of buying a vehicle without having to leave your house and some considerations to keep in mind.

Pros to Online Car Buying

  • Convenience is likely the biggest pro to shopping for a car online. You don’t have to go to multiple dealerships and look for what you want, and many online dealers offer drop-off options.
  • Freedom to shop on your own time, not limited to dealership hours. If you have a busy schedule, you can still shop for vehicles anytime.
  • More options are available to you when you shop online. Online car buying can give you the power to expand your search outside of your immediate area.
  • No haggling, at least in the traditional sense. Many online auto dealers have fixed prices. If negotiation is an option, you may not have to do it in person, which could make it easier for you to ask for a lower price.
  • Research is easier, and while most everyone researches vehicles before they buy anything, it’s even more of a breeze to do so now. Along with the ability to compare prices of cars outside your general area, you can also use online valuation services like Kelley Blue Book and NADAguides to check out the average selling price of the vehicle you’re looking to buy. You can also use our new and used car listings to shop and compare prices, models, and variety, all at your fingertips.

Cons to Online Car Buying

  • Possible risk of online scams is something to consider. If you intend to shop for your next car online, make sure it’s from a reliable dealership. Be sure to check for buying protection, and avoid using peer-to-peer payment services.
  • Test drives can get tricky, and you’re likely to need to schedule one if you want to drive the vehicle around before signing a contract. For some, the process of shopping online could be diminished if you still need to go somewhere to test drive the car you want. Check the online dealer to see if they can drop the vehicle off for a test drive, but know you may need to go to an actual brick-and-mortar dealership if they don't offer this option.
  • Prices might be fixed, which could mean haggling is off the table. For some borrowers, this could be nice, but others live for the deal!
  • Lender choices may be limited, which means it could be harder to rate shop. If you have less than perfect credit, your lending options are probably more limited than most, but it’s something to consider. Don’t forget that not all lenders can work with all types of borrowers.

Other Considerations of Online Car Shopping

While some states have opened up their virtual showroom doors, there are others that have limits on how contactless a car buying transaction can be.

In some states, there must be a notary present when you sign a vehicle’s title. Additionally, some dealers may require that you sign all the documents in person, and others may not have the technology to do paperless transactions.

Another consideration is whether you’re completely buying the car outright or financing it with an auto lender. If you’re planning on purchasing the vehicle with a lender, you may need to leave the house to see them, like a direct lender from a credit union or bank. There are some online third-party lenders out there, but if your credit score isn’t the best, you have some issues getting approved for a car loan.

You may be able to get financing through the dealership itself and keep the transaction paperless, but again, with a lower credit score, this could prove difficult.

Buying a Car Online and Bad Credit

Most people research what kind of vehicle they want to buy, which shouldn’t come as a big surprise. However, many people don’t rate shop – that is, look for the right lender for their situation before they choose a car.

But what if you have bad credit? Can you still purchase a vehicle online with a lower credit score? Again, it largely depends on what car dealer you choose.

Oftentimes, traditional lenders require borrowers to have good credit scores, and those with credit scores in the “subprime” range tend to get turned down for auto financing.

Due to this, many bad credit borrowers are often turned away when they seek out online third-party lenders, credit unions, banks, and automaker’s captive lenders. Being turned down for financing due to your credit score can make your next vehicle purchase frustrating, but bad credit borrowers still have options.

There are dealerships that are signed up with bad credit car lenders, also called subprime lenders. These are third-party lenders, and the dealer’s special finance manager works on their behalf. If you locate a special finance dealership that has the ability to do online transactions, you may have a better chance of getting an auto loan approval with bad credit.

Start Car Shopping With Us

Since not all lenders can work with every type of borrower, finding a dealer with the lending options you need can be a hassle. Here at CarsDirect, we have a nationwide network of dealerships with bad credit lending resources, some offering completely online buying options.

If you’re struggling with credit issues and want to get in touch with a dealer that has the lending options you need, fill out our auto loan request form. It’s secure, there’s never an obligation to buy anything, and the best part is that it's completely free!


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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