Thinking About Buying Your Next Car Online? Here's What You Should Know

While it's true that some people bought cars online before the pandemic, the number of customers who did so while quarantined (or simply spending more time at home) went into overdrive. Carvana, an online dealership, reported 37 percent higher sales in 2020 over 2019, and overall car buyer satisfaction industry-wide was up.

A Cox Automotive study directly linked the increase of customer satisfaction to an increase in online car shopping. This makes a whole lot of sense; car dealerships have a long history of tense, uncomfortable shopping experiences, especially for women and queer people.

And it seems that buying a car partially, or fully, online, isn't going anywhere. A 2021 Adtaxi study found that 49 percent of car shoppers are comfortable buying a car completely online. But is this really the best choice? How can you avoid buying a car that's going to cost you money to repair, or one that might not actually fit your needs if you've never driven or inspected it?

Buying a car is a huge financial investment. Let's dig into the world of digital car buying so you have a crystal-clear picture of the pros and cons as you begin your car search.

What does it mean to buy a car online?

While Carvana, Vroom, and others offer fully digital car-buying services, that's not the only way to take advantage of the online car-buying process. Many local and in-person dealerships, such as Carmax, have also moved much of the car-buying process online.

Now, not only can you look for a car online; you can easily apply for financing, negotiate via email, and have a car delivered to your door for test driving. The dealership may even allow for an extended test drive of a few hours—or even a whole day, to give you a chance to really determine if this is the right car for you.

Some places will even allow you to do much of the paperwork digitally, and once the deal is nearly complete, bring the car, and the paperwork to your home for final inspection and signatures.

If you do buy from an online dealership, rather than a brick-and-mortar location, the process is similar. However, you normally don't deal directly with a salesperson, you don't have the opportunity to test-drive the car (in many cases), and the sale is final before the car gets delivered to your front door.

Here's more about the pros and cons of online car shopping, so you're prepared before you dive in.

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Con: No test-driving.

Before buying a car, you have to start with doing a whole heck of a lot of research. That shouldn't change if you are thinking about shopping for a car online or buying it sight unseen. In fact, it's even more critical. When you buy a car directly at a dealership, you have the ability to look over the car from bumper to bumper and to test drive it to make sure it fits your needs.

When buying from an online car dealership, you don't have that ability, so research is your only way of determining the best fit. "If you are even thinking about buying online you need to test drive that vehicle somehow," says Carrington Cowart, a private automotive consultant who helps people buy cars. "It might not be the one that has the same VIN number that you would be purchasing, but if your aunt owns one, go drive it. You need to drive one because you have no idea whether or not you like it or not."

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Pro: Lots and lots of options.

If you are looking for a car in a specific color or one with very unique add-ons or features, buying a car from an online dealership will offer you lots of choices. It makes buying a rare car or one with a rare combination of features much easier, saving you time and hassle.

It also allows you to easily buy a car from further away, not limiting you to your local area to find your perfect car. "Not everyone has the luxury of having every vehicle they could possibly imagine in their metro area," says Cowart. "Their ability to look at a large number of cars where they can be picky in finding the things that they want is a game changer."

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Con: No negotiation.

Well, maybe this isn't quite a con. Some people find the lack of negotiating attractive. But for others, it means paying more than they would be negotiating with a local dealership. When buying a car 100 percent online, that usually comes with what's known as "clear and transparent pricing," which is a fancy way of saying you can't negotiate. Usually, you'd wind up paying more online than at the dealership if you negotiate. If you hate haggling for the best deal, this is an excellent way of avoiding it.

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Pro: Low-pressure shopping from home.

Going into a dealership and haggling with car salespeople isn't everyone's cup of tea. In fact, many of us would rather do almost anything than face the high-pressure sales tactics, the sexism, and the hardball negotiating that often comes hand-in-hand with buying a car. Shopping and buying a car online can be done from the comfort of your home, on your own timeline, and without pressure.

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Con: No inspection before buying.

I believe that getting a pre-purchase inspection by a mechanic is a critical part of the car buying process. It allows you to make sure that you are aware of exactly what condition the car is in. If something's wrong, you could negotiate that repair to be handled prior to purchase. If not, you can make an educated buying decision, and budget for repairs. Buying a car online doesn't allow for this. However, most online car purchases come with a return period, so if you buy online, be sure to get it checked out immediately after purchase.

Final thoughts

Personally, as an auto journalist, automotive expert, and a car buyer myself, I'm not sold that buying a car completely online is the best option for most car buyers. My main reservation revolves around not having the ability to test-drive the car in order to determine whether it's a good fit for your needs—that, and not having a comprehensive pre-purchase inspection. Most online car dealerships do offer a certain return policy, but it's often complicated and not clear how it would be executed if you had outside financing.

If buying online is attractive to you, I recommend doing most, not all, of the car-buying process online—if a hybrid method is available through your local dealerships. This will allow you much of the benefits of buying online (such as being able to shop from the comfort of your home), while not sacrificing the test drive, the negotiation, and the pre-purchase inspection.

Note that if you are buying a car that's still under the initial manufacturer's warranty, however, buying a car online doesn't have the same risks. Ultimately, you must weigh the pros and cons yourself—and hopefully now you can make the most educated choice possible on what's best for your needs.

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