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Buying a Car Online: What You Need to Know

If you used to think the idea of buying a car online, especially without doing a test drive, was insane -- you may be rethinking that.

After all, now that COVID-19 has taken over our lives, the idea of buying a vehicle the traditional way can seem extremely dangerous.

In fact, it's easy to imagine – if nobody took precautions – how quickly you might come to regret a car purchase. You shake hands and walk around the lot with the salesperson.

You mingle among other shoppers. You do a test drive, perhaps breathing in the air of the last driver who also got his or her germy hands all over the steering wheel.

And for the finale: You’re in a cramped office, for maybe an hour, signing paperwork, just a few feet away from a finance manager.

Small wonder that some online car selling businesses have marketed their services as the safest possible way you could buy a vehicle. Buy a car online, interact with nobody and live to drive another day.

But before you rush through the online car buying experience, put on the brakes and think over a few factors first.

Consider Your Timing

If you’re confident you are going to keep your job throughout the pandemic, this is arguably a wonderful time to make a purchase.

That’s because the auto industry is struggling, big-time, in the wake of the coronavirus, which is terrible for the economy but a lucky thing for car buyers.

Some automakers are offering 0% financing, though you will generally need excellent credit to get that.

So if you feel that you can afford to buy a car right now, and you want to get a good deal, you’re probably in the driver’s seat.

Obviously, if you’ve lost your job or fear losing it, it may not be the best time to buy a car.

Online car-buying sites aren’t the only way to buy a car without exposing yourself to the coronavirus.

If your main reason for buying a car online is because you fear catching the coronavirus, don’t discount the notion of purchasing a car from your favorite car dealership. You should at least look at its inventory on its website and call the front office and ask how they’re handling sales. You will probably find that you can do everything online at a conventional car dealership – and still remain socially distant from everyone.

Nobody at your dealership wants to catch coronavirus either – for all they know, you have it – and so they’re taking precautions. If you want to do everything over the phone and through email or texting, a traditional car dealership will likely do whatever it can to make that sale.

And some dealerships already have a strong online buying component. For instance, if you are interested in a General Motors vehicle – that is, a Chevrolet, Buick, GMC or Cadillac, the company has an online buying program called Shop-Click-Buy. If your car dealership is a participant in the program, you can buy a car, including the financing, from your house – and you can even get your car delivered.

There are a lot of online car buying sites out there, probably more than you think.

If you’re thinking, “No, no, it’s online car buying for me,” then some of the bigger brand names you may want to look at include:

  • CarGurus. You can buy new and used cars here.
  • TrueCar. Sells used and new cars.
  • Cars.com. Also sells used and new cars.
  • Carvana. They sell used cars.
  • Vroom. Used cars are also their thing.
  • eBay Motors. You can buy used cars from private buyers. Being eBay, you may have to bid for a car.
  • CarMax. New and used cars.

Most of the car buying sites you’ll find, on this list or elsewhere, will help you with the financing (that is, they offer financing or partner with a lender that does). Occasionally you’ll find a car buying site, like Cars.com, where you’ll have to get outside financing, but that isn’t necessarily a bad thing, and we’ll get to that in a moment.

Some car buying websites offer limited warranties, such as a 1,000-day warranty, but you aren’t likely to get an extended warranty the way many car dealerships offer. That may or may not bother you.

But what’s really interesting about car buying websites is that, the more you start thinking about it and looking into the idea, the more you’ll notice that some of these car buying websites are, in a way, no different than traditional car dealerships.

CarMax, for instance, may be perceived as an online buying car website – but it has 225 locations around the country. Which means that you could buy a car online from the website, but you could also go into a store and buy a vehicle in the same way your grandparents did.

Carvana is interesting because they don’t have locations, where you can walk in and buy a car. They have, scattered in cities across America, what they call car vending machines. That makes it easier for them to deliver cars to consumers around the country.

Financing Online

As noted, Cars.com doesn’t offer financing through the website, but that may be a good thing.

It’s generally recommended that you try to get financing before you buy any car, whether you’re visiting a dealership – or visiting an online car buying site. A car you like may wind up being out of your budget, in which case then you have the salesperson and especially the dealership’s finance manager trying to work something out.

Chances are, he or she will find you a loan but maybe not a great one. Maybe the math only works because you’re paying off the car for seven years.

It’s far better to land the car loan first, with somewhere like your bank or credit union, and then, knowing you’ve been approved, go looking for a car online or off.

Still, if you haven’t been able to find a car loan by comparison shopping with various lenders, then, yes, many of the car buying websites offer financing, just as conventional car dealerships do.

One important thing to mention about buying a car through an online-only service is that you generally can’t negotiate a deal on the price. The prices are generally fixed and immovable.

If you hate haggling or rarely get a dealership to come down on the price, anyway, that may not bother you in the least.

Be Wary of Scams

One advantage the big-name car buying websites have over purchasing a car through, say, a private citizen is that you’re not likely to be scammed. If you are going to buy a car online from a stranger, you do want to be careful.

You’re going to need to do a lot of legwork first, such as requesting the vehicle identification number (VIN) and making sure the owner has important paperwork, like the title.

Bottom-line – if you’re buying a car from somebody you don’t know, get to know the person and the car. Test drive it – as safely as you can imagine in the age of the coronavirus.

Don’t send money to somebody for a vehicle, based on photos and the hope that you’re working with an honest person.

To Test Drive – or Not?

It can be challenging to do test drives through car buying websites, though some car buying sites do allow it, without charging you a shipping fee (and if you do pay a several hundred dollar shipping fee, that’s a heck of a costly test drive).

For instance, Shift, a car buying website that mostly sells to California residents, allows test drives.

Even in this age of Covid-19, you can test drive the car, the Shift website declares.

It promises that your “Shift Concierge” will bring you the car and wipe it and the keys down and then you can try it out.

If you’re near a CarMax location, you can obviously do a test drive.

  • An argument for not doing a test drive: If you’ve ever rented a car for a vacation, did you test drive it first? Probably not. Maybe the car was weird to drive at first, but you got used to it, right?
  • An argument for doing a test drive: Are you nuts, suggesting I don’t do a test drive? I’m going to spend tens of thousands of dollars on a car that I’ve never set foot in? C’mon, get real.

Online car buying websites are very aware of Covid-19.

OK, every business in the world is acutely aware that there’s a pandemic going on, but here are some comments from a couple of these sites, just to give you a sense of what to expect when buying a vehicle from them.

  • CarMax. The website reports, in part: “We have and will continue to put precautions in place to keep our facilities clean and well sanitized for your safety. Please know, you will only be allowed to test drive alone. We also offer home delivery at many of our locations, where you can choose to complete the car-buying experience from home and have the vehicle delivered by a CarMax associate. Additionally, many stores offer expedited pickup, so you can complete more of the car buying process online in advance and spend less time in store.”
  • Carvana. If you go the website and click on its Covid-19 link, a box will pop up with the message that reads in part, “At Carvana, it’s our goal to give everyone peace of mind—even during some of our most challenging times. That’s why we’re giving our customers up to ninety days to make their first payment. Now, you can shop for your next car 100% online without worrying about making a payment for up to the first 3 months. We’ll even bring your car right to your driveway with touchless delivery to keep you safe.”

True Car, meanwhile, is offering a number of relief programs for people who buy cars through them, deferred payment programs from 90 to, in at least one case, 180 days.

Still, you should ask yourself, “If I am worried that I can’t make car payments for 90 or 180 days, should I be buying a car right now?”

Maybe the answer is an emphatic yes – if you absolutely need a car, and the idea of public transit right now is unsettling.

Whatever you decide – that it’s a terrific or terrible time to buy, that you’re going to purchase from an online buying car web site or you’re not -- you still want to be careful that the car loan is one that you can afford.

You also want to look at enough vehicles, even if it’s all done via online inventories, to make sure you buy something that you feel really good about.

You don’t want to catch Covid-19 while shopping for a car, but you also don’t want to drive around with buyer’s remorse. Global pandemics aside, some things never change.