Pros and Cons of Buying a Car Online

Jack R. Nerad | Feb 12, 2021

Consumers are growing more comfortable with buying a wide variety of things online, from fruits and vegetables to couches and cars. Partly by necessity and partly because we've realized how convenient and time-efficient it is, we've become quite comfortable with online buying.

But should you buy a car online? Or is the process too complicated and personal to lend itself to the online buying process?

Undoubtedly, there are pros and cons to buying a car online. While history favors the traditional in-person car-buying process, those who look to the future see a trend pointing toward an increase in online car-buying going forward.

Before we outline the benefits and disadvantages of buying a car online, let's define what online car buying really is.

What It Means to Buy a Car Online - Find the best car deals!

Pros and Cons of Buying a Car Online

Before we get to the pros and cons of buying a car online, let's define what online car buying is and what it isn't.

The vast majority of American consumers now shop online for their next car. A summary of consumer behavior surveys in this area suggests that over two-thirds of car-buyers go online to research a car, find cars listed for sale, compare different models, determine what their current vehicle is worth, calculate car loan payments, and get dealer information. Car shoppers also use social media to learn about vehicles and dealerships. Shoppers enlist dealer website chat functionality to gain information and negotiate with car dealers as well.

If you asked these people if they are online car-buyers, they might tell you yes. But buying online is different than shopping online. By the strictest definition, a customer is buying a car online only if they complete the entire transaction from start to finish using the Internet.

Think of it like buying a book or a throw rug from Amazon or eBay. But with far more significant potential for buyer's remorse if you don't like what shows up in the driveway.

New Cars and Used Cars - Find the best car deals!

New-car buyers are often thought of as different from used-car buyers, and in many ways, they are. However, one thing they share is the propensity to go online to perform vehicle and dealer research. Several consumer behavior studies indicate that nearly 75% of both new-car and used-car shoppers use websites and apps to conduct at least some of their research and shopping.

When it comes to buying a car online, used-car buyers might find their task easier. That's because online used-car sellers like Vroom, Carvana, and Shift heavily advertise their services.

Their marketing messages often emphasize their clients' ability to avoid visiting a dealer and talking to a car salesperson. In actuality, though, they technically are car dealers because virtually all 50 states require any business that sells more than a handful of vehicles each year to hold a dealer's license. The online used-car retailers have changed how the buying public perceives them because of the online experiences they offer.

Now, some individual new-car dealers and dealer groups also offer end-to-end online car buying. Their goal is to deliver the same ease and transparency that the online sellers of other products offer their customers. At the same time, their traditional dealership activities for conducting test drives, getting service, and comparison shopping are also available to their customers.

Pros of Buying a Car Online - Find the best car deals!

One of the significant benefits of buying a car online is that it often saves time. Few of us want to spend an entire Tuesday night or Saturday morning in a car dealership trying to get a deal done. Using this traditional method, consumers and dealer personnel can spend hours on a single transaction, and neither side is pleased about that. Online car-buying can streamline the process by enabling time-consuming chores, like filling out paperwork, to be done at the customer's leisure.

Equally appealing to many car buyers is the no-negotiation/no-haggle nature of an online car deal. Typically, prices are clearly posted, and as consumers submit personal information regarding their credit history, trade-in vehicle, preferred down payment, and other details, the numbers automatically update. Sellers present each consumer with the same baseline pricing, and typically those prices are non-negotiable. For many modern car buyers, that's just the way they want it to be.

At the same time, there is no sales pressure. The deal is not shepherded along by a salesperson whose commission and livelihood depend on the deals she or he makes. Usually, there is someone on the dealer's staff who does care about those things, but they don't come into personal contact with the customer. While plenty of car salespeople are lovely, honest, nice-to-know people, a significant percentage of the American car-buying public is happy about never dealing with a car salesperson again.

Another benefit of online car-buying is that you can shop for and buy a car virtually any time it is convenient for you. And you can do it in your sweats on a workout bike at three in the morning if you want to. When you don't want to deal with the process for a while, you can stop and pick up the transaction thread again when you're ready to move on.

Similarly, with online car buying, you can take delivery at home or virtually anywhere you want. An expert will deliver the vehicle to you and give you all the information you need to operate your new car properly.

Cons of Buying a Car Online - Find the best car deals!

While there are many positives to buying a vehicle online, there are a few negatives. One of the most important is your inability to see, feel, and physically inspect the car you've selected before buying it. Of course, most online sellers give their shoppers extensive photos and video of each vehicle, but nothing really takes the place of seeing the car up close and personal.

Similarly, you often have no opportunity to test drive the vehicle before you buy it. This disadvantage represents another shortfall because, for many of us, "driving is believing." In the past, online sellers have tried to compensate for this by offering used-car warranties and even return policies to their customers. Now, online car sellers increasingly provide test drives at your convenience and at a time and place you choose.

Another downside to buying a car online is the relative inability to negotiate on price or terms. For many people, that is actually a positive, but some shrewd negotiators might miss the opportunity to score themselves a great deal, or at least to think they did.

Perhaps one of the more significant cons to buying a car online is that financing choices might be limited. You may find the online sales process restricts you to a single lender or one of just a handful with which the dealer has a relationship. Of course, you can secure financing before the online shopping process and then purchase the car as a "cash buyer." But that complicates what otherwise would be a straightforward and time-efficient exercise.

The final downside to online car buying is the trade-in. If you don’t want to easily sell your car on your own, the trade-in value of your current car is an essential factor in determining the deal's quality, and it is difficult to resolve a difference of opinion on the trade-in value in an online buying scenario. Know, however, that consumers with a trade-in are buying vehicles successfully online every day.

Summary - Find the best car deals!

Deciding whether buying a car online is right for you depends upon what you look for in your transaction. If you want speed, convenience, and lack of hassle, buying online could be a great choice for you. On the other hand, if you're the kind of buyer who wants to see, touch, and smell the car before you buy it, or you want to grind the dealer down to the lowest possible price, online car-buying might not be your best choice.

Jack R. Nerad has covered car buying, auto retailing, and the automotive industry for more than three decades. He has held editorial director posts at dealership, consumer, enthusiast, and market research publications; appeared on television as a car-buying expert; and hosts a popular podcast. He is the author of several books including The Complete Idiot’s Guide to Buying or Leasing a Car.

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