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How to buy a car online

Buying a new car online is a convenient way to purchase a vehicle from the comfort of your home.

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Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated|6 min read

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When buying a car online, you should have an idea ahead of time about your budget and financing options, a fair price of the car you’re interested in, your current car’s trade-in value, and what you’ll pay for insurance.

You can buy a car online in eight basic steps:

  1. Figure out your budget

  2. Think about the car you need

  3. Get pre-approved for a car loan

  4. Shop around for available cars and compare prices

  5. Schedule test drives

  6. Know your trade-in value

  7. Negotiate your new car’s price

  8. Shop for insurance and register your car

  9. Schedule your new car’s delivery

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1. Figure out your budget

The first step of buying a car online is to figure out how much you can afford to spend. While the newest model might sound the most appealing, you don’t want to spend too much and risk not being able to keep up with your payments.

Figuring out how much you can afford to spend on your new vehicle will make it clear whether a lease, car loan, or an outright purchase makes the most sense for you. You can also estimate your car insurance payments ahead of time too.

What should your down payment be?

When you’re figuring out your budget for buying a car online, you should also think about the down payment. Plan to put down at least 10% of the car’s price, but if you can afford it, a larger down payment can lower the amount you’ll have to pay in interest over time.

2. Think about the car you need

Not every great car is right for every driver. For example, it makes more sense for a young driver living on their own to get a smaller car than it does for a growing family, who may sacrifice sleekness and opt for a large sports utility vehicle or minivan.

Once you have decided on a few cars that you like, be sure to research each model online (including what comes with every trim level). This can affect a car’s size, carrying capacity, appearance, and performance.

3. Get pre-approved for a car loan

Getting pre-approved for an auto loan can help you get the best price on the vehicle you want to buy online. When you’re pre-approved for a car loan, you can negotiate with an online dealership or seller knowing that you don’t have to use their financing offers.

4. Shop around for available cars and compare prices

You don’t have to go into a physical dealership to find out which cars are available in your area. Usually, dealerships and online car retailers like Carvana and Vroom will list all the cars they have on their lots or in their inventories.

Compare the sticker prices for the cars you want at different sellers. Knowing the cheapest price out there will help you negotiate.

By checking out local dealership websites in your area, you can also find out everything else you want to know about a car you’re thinking of buying online, like its:

  • City and highway fuel economy

  • Transmission type

  • Driveline

  • Color options

  • VIN (if you’re looking at a specific vehicle)

When is the best time to buy a car?

You might be able to save money when you’re buying a car online if you shop at the end of the month, or around the time when you can get rebates on your purchase. Salespeople may accept lower offers at the end of the month (or sales quarter) to meet quotas.

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5. Schedule test drives

Even if you have your mind set on a car, you should still schedule a test drive before buying. This is especially important if you’re buying a used car online, since you’ll want to make sure there are no hidden structural or mechanical problems.

You can schedule a test drive as you shop local dealerships and manufacturers online. With smaller dealerships, you might have to make an appointment to try out the car in person.

On your test drive, make sure to inspect the exterior of the car. You should also try out features like air conditioning, heating, lights, and wipers to make sure everything works. While you drive, pay attention to handling and braking.

6. Know your trade-in value

One important part about comparing car prices online for a vehicle you want to buy is knowing your car’s trade-in value (if you already have a car). 

Your car’s trade-in value is the amount of money that a dealership or retailer will pay you for your old vehicle. You’ll be able to put the money from that sale toward your new car, potentially saving yourself thousands of dollars off the new vehicle’s sticker price.

You might have to make a trip to the dealership to trade in an old car. Some online sellers will assess your car’s value after you answer questions about your vehicle’s condition, mileage, and other basic details. Others (especially smaller, local dealerships) could require you to come in for a full appraisal.

7. Negotiate your new car’s price

You may still be able to negotiate the price of your vehicle when you’re buying a new car online — and if you can, you should. It’s a great way to get a better deal.

There are a couple of ways that you can negotiate a better price on the car you want to buy online. First, once you’ve been pre-approved for financing by a third-party, you can limit (or eliminate) the extra cost of financing that dealership will offer you. 

You can also negotiate a lower rate by turning down any add-ons that a dealership will offer, including long warranties, security offers, and accessories. Declining these features can lower the price of your new car by a significant amount.

Is buying a car on the internet safe?

The safest way to buy a car on the internet is by purchasing vehicles from a legitimate dealer or online company rather than from a private seller who posts a car for sale on social media, like Facebook Marketplace.

Be wary of offers that sound too good to be true and don’t give personal information or cash to sellers that you haven’t researched. Scammers may steal your identity, post fake car sales online and pocket any down payment you provide, or try to pass off a heavily damaged vehicle as one that’s in good condition.

8. Shop for car insurance and register your car

When you buy a car online, you still need to get it insured and registered. An existing policy will automatically cover the car you bought online for a little while, but you’ll have to let your insurance company know about the new vehicle eventually, and you’ll mostly have to show proof of insurance to complete the purchase.

If you don’t already have car insurance, you’ll probably have to get a policy before you can schedule a delivery. You can usually get the lowest insurance rate on a car you bought online by comparing quotes ahead of time.

Schedule your policy to start on the day when your car is delivered. And register your car with your state’s DMV within the period of time your state requires. This may include getting your vehicle inspected at a licensed station.

→ Read more about how to shop for car insurance

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Can you register a car online?

You may be able to register your car online, but it depends on where you live. That’s because states have different laws about the ways you can register your vehicle.

Some states allow you to renew your registration online, either bi-annually or annually. Other states allow you to register your new car if you bought it in-state. Others might allow you to mail-in a registration form.

9. Schedule your new car’s delivery

After you finalize your online car purchase, pick a day to get the car shipped or driven to your home. Some dealerships or online retailers will let you sign any necessary paperwork electronically.

It’s important to keep in mind that you might have to pay shipping costs if you decide to have the car you bought online delivered to your house. But you can usually schedule a physical pick-up if you want to avoid paying extra for delivery fees.

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Frequently asked questions

What is the safest way to buy a car online?

The safest way to buy a car online is by purchasing your vehicle through a reputable seller. You can also use an online vendor, like Carvana or Vroom, to buy a car online.

Can you fully buy a car online?

Yes, dealerships commonly post their inventories online, along with prices and spec information, so you can get a car without having to make an in-person visit to a dealership. If you fully buy your car online, you may have to pay a delivery fee to have your vehicle shipped after you finalize your purchase.

What is the best online site to buy a car?

The best place to buy a car online depends on which dealerships offer online catalogs of their products and whether any online-only companies sell vehicles near you. If you’re planning to use an online site to buy a car, be sure to research ahead of time to be sure the company is legitimate.