Buying a Car Online vs. In Person

Pros and Cons of Buying a Car Online

Nearly three-quarters of car buyers turn to the internet to research and compare car models and look up local dealer listings, according to J.D. Power. With some websites, though, it's possible to complete the entire car-buying process from the comfort of your couch.

Here are some of the benefits and drawbacks to consider before deciding to buy a car online.

Pros

• Convenience: When buying a car online, you don't have to spend half a day at a dealership trying to close a deal and take care of the paperwork. Instead, you can complete your side of the transaction at your convenience and save some time along the way. Once you finalize the deal, a representative will drop the car off at your home.
• No haggling: When shopping online, prices are typically non-negotiable. So, whether you get stressed about the negotiation process or you simply don't enjoy working with car dealers, you can skip the haggling and sales pressure altogether.
• Wider selection: When visiting your local dealership, your options are limited to what's on the lot. When you shop online, however, you can look beyond local dealerships for a wider selection of vehicles. This can make it easier for you to find the right model at a competitive price. Just keep in mind that if you look too far outside of your area, you may have to pay a per-mile delivery fee.

Cons

• Sight unseen: While online sellers can send you photos and even a video tour of the vehicle, you won't be able to take the car for a test drive or do an in-person inspection before you buy. Some sellers compensate for this inconvenience by offering a money-back guarantee if you're not satisfied. However, be sure to review the fine print to understand the terms and costs.
• Inability to negotiate: If you're a skilled negotiator, you may be able to get a better price by haggling with your local car dealer.
• Financing limitations: Car dealers can often arrange financing for you by shopping your credit application to several lenders. With online dealers, however, you may not have as many loan options unless you shop around for a loan before you start the car-buying process. Also, if you want to trade in your current vehicle, that may not be an option online.

Learn more >> How to Get Approved for a Car Loan

Pros and Cons of Buying a Car In Person

While you can complete your research online, visiting a local dealership to complete the process is the traditional car-buying approach, and it comes with some clear advantages. For some, however, there are some potential downsides to consider.

Pros

• Physical inspection: When visiting your local dealership, you can inspect and test drive the vehicle to make sure it's free of major defects and fits your driving style.
• Negotiation: If you're on the hunt for the best deal possible and have no problem with haggling, you may be able to score a better offer. This is especially true if you can align your purchase with the best times of the year to buy a car.
• Flexible financing options: Even if you get preapproved for an auto loan before heading to the dealership, you may have access to more financing options through the dealer than you would with an online dealer. This can help ensure you get the best interest rate possible. You'll also have an easier time trading in your current vehicle.

Cons

• Greater time investment: Even if the process goes smoothly, it can still take several hours to close an in-person deal. If you don't have much free time, the time investment can be a major obstacle.
• Potentially limited inventory: Although you can compare prices from several dealerships in your area, it may still be challenging to find the exact model, year and mileage you're looking for compared to shopping online.
• Sales pressure: While shopping online can be a relatively stress-free experience, you may need to be on your guard from the moment you step into the dealership. In addition to price negotiation, dealers may also try to add on extra costly services or convince you to take a loan that's in the dealer's best interest.

Learn more >> When Is the Best Time to Buy a Car?

How to Decide Which Option Is Right for You

For some people, the decision between buying a car online or in person is crystal clear. If you're not sure, though, here are some factors to consider:

• Time and other constraints: If you have little free time or your circumstances make it difficult for you to spend a large chunk of time at a dealership—for example, you're a single parent with small children or have physical limitations—buying a car online may be worth it. If those aren't issues, however, consider other variables.
• Financial situation: If you're on a tight budget, you may be better off braving the negotiation process at your local dealership. The same is true if you're planning on trading in a vehicle or you want the dealer to arrange your financing. However, if you're not concerned about maximizing your savings through haggling or you're willing to accept a higher price to avoid it, you may still be able to get a good deal online.
• Comfort with technology: If you feel comfortable navigating the auto loan and car-buying process completely online, it could be a viable option if other factors align. However, if buying a car online feels daunting, you may be better off dealing with a dealer in person who can answer your questions.

Prepare Your Credit for Your Next Car Purchase

Regardless of how you decide to buy your next car, it's important to ensure your credit is in good shape for an auto loan. Before you start researching and comparing models, register with Experian to get free access to your credit score and Experian credit report.

You'll be able to gauge your current credit health and also identify areas where you can potentially make improvements. If your credit score is low, you may still be able to obtain an auto loan. However, it could make sense to wait and improve your credit score first to improve your chances of securing a low interest rate.