The Internet is now the vehicle of choice. Its breadth and coverage are matched only by its ease of use. And there is no time or location limit to buy new cars online. If you want to find a car that best fits your needs, finances, and personality, we recommend that you be organized when shopping online.
What are the benefits of buying new cars online?
There are many benefits to buying a car online. To get you in the mood for shopping, we're happy to explain:
The options of new cars are almost endless
No sales pressure
No time pressure
No working hours to interfere with your search
Easy access to video and photography
Easy access to trading and incentive information
When you compare these advantages with the hassle of going from dealership to dealership to view vehicles and learn the basic price, it shouldn't be hard to convince you that the rigorous online shopping process is the right one.
How to budget for a car?
A key way you can put structure into your online car shopping is to build a budget for new cars. A good rule of thumb is to plan to spend no more than 15% of your total monthly budget on the total cost of your car, including the vehicle, insurance, license plates, maintenance, and repairs.
You can use a car loan calculator to determine how your monthly car budget translates into a loan total. By adjusting the down payment, the term of the loan, and the interest rate, you can see how much you can afford. Remember, popular financial advice is to avoid taking out loans for more than five years if you must.
This guideline will give you an idea of how much you can reasonably pay each month. Of course, you don't need to spend that much, and some personal finance experts suggest you avoid getting a car loan altogether. Instead, they suggest you save some of your income each month until you have enough money to buy a car or truck, which in this case is usually used.
Whatever choice you make, your online car-buying efforts should be determined by how much you can afford to pay for your next car. If you have $15,000 in the bank to spend on cars, limit your purchases to cars of $15,000 or less. Even if you take out a loan to buy a car, you may need to make a sizable down payment, perhaps as much as 10% of the purchase price.
Once you know what you can afford, buying a car online is much easier.
Get pre-approved for a car loan
Another valuable way to find out how much you can afford is to apply for a car loan online. Many finance and banking websites let you compare store loan rates and availability and apply for a loan online.
Through this “pre-approval” process, which means that when you're ready to buy a car that meets the loan parameters, the institution will give you a loan and you'll know what you can afford based on your current credit rating, available loans, and current interest rates.
Getting pre-approved for a car loan is an added advantage. It gives you a benchmark against which to compare other loans, including those recommended by the dealer's finance and Insurance (F&I) office.
If you get approved for a loan in advance, you know your credit rating and what interest rates you qualify for. Your pre-approval incentivizes dealers to try to beat the best deal you've received, rather than finding a way to artificially inflate your prices and pad profits in your trades.
Should I buy a new car or a used one?
Once you've reached the appropriate amount you're willing to pay for your next car, you can use online information to help you decide whether you want to buy a brand new car, a used car, or basically meet the middle by buying a certified used car (CPO).
New cars have the advantage of warranty coverage, which protects buyers from the need for repairs, sometimes for at least three years. CPO vehicles, typically used for up to five years, are also covered by a warranty that can be extended for several more years. Most used cars are sold “as is” with no warranty at all. What you see is what you get. Some online used car sellers, such as Carmax, Carvana, and Vroom, offer limited warranties or return policies.
One way to help yourself with this decision is to use a site like this and use a car search tool to find new, old, and CPO versions of the model you're considering. It's a quick way to compare the prices of the three models.
As you surely know, an older version of a particular model can be cheaper than a new one. A CPO with a warranty will be more expensive than a traditional used car, but you may find the peace of mind you get from a warranty is worth the extra cost.
For additional tips on how to find the right car for you, we recommend reading how to search for a car online.
Check out car deals
At this point in your online car shopping process, you should have a good idea of the car you want to buy. You'll know the make and model, and maybe some details like trim and selection, and you'll know if you want a new, old, or CPO version. Now is the time to examine trading and incentives.
If you're looking to buy a brand new car, you can start looking for discounts on the automaker's consumer website. From there, you can go to a page that describes the car you want to buy, or you can go to a section often called “shopping tools” or something like that. Look for buttons or links marked “Deals,” “Rewards,” or “local specials.” Here you'll find regional promotions that can save you a lot of money.
If you're looking to buy a CPO car, the auto manufacturer's website is also a useful resource to find out what the CPO program includes, search local INVENTORY of CPO vehicles, and learn about any discounts or loans/lease offers.
If you're buying a used car, your deal depends entirely on your negotiating skills. The first thing to know is the average trade-in and retail value of the car. Use online classifieds to search for the same brand and model to find out what the asking price is before negotiating.
Search for vehicles available at multiple dealers
At this point, you've narrowed your shopping down to the specific year, make, and model of the car you plan to buy. Now, it's time to find the car you want.
Again, you will begin the process online. You can use third-party sites to access classified ads for new, used, and CPO vehicles. Since there are millions of cars for sale on the Internet at any one time, use the tool's filters to limit your search to cars near your make, model, year, and price parameters.
Alternatively, you can search for new, used, and CPO inventory at your local dealership through the automaker's consumer website or the dealer's website. This approach works best for people who don't want to travel far, or who want to support the local economy, or who have developed a good relationship with a dealer they trust.
Either way, once you've found the car you want to buy, it's time to start parking it in your lot, driveway, or garage.
Conclusion
When you use this method to find an actual car for sale near you that meets all of your purchase criteria, you're finished with your online shopping journey and ready to begin your online negotiation, purchase, and delivery process.
