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Tips for buying a car online

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Buying a car is a different process today from what it was even 5 years ago. The biggest change is that now, almost all the tips for buying a car listed below can be done on your computer, tablet, or smartphone rather than in person.

This is partially due to pandemic-related safety procedures, but it’s also because of the increased amount of car-related information online. In short, customers now have more choices. Those who want to shop for a car in person can do so; those who prefer doing most of their shopping remotely have that option.

What’s more, these trends are likely to continue. Auto-industry studies confirm that many customers prefer to buy a car online. Here’s a breakdown of the process:

1. Do your research

Decide which cars you’re most interested in. List the make, model, trim level, accessories, color, and so on. Then visit online automotive search engines like to see what cars are available.

You’ll see available cars, prices, and, sometimes, an indication of whether a price is a good deal. Also, check dealer and automaker websites for incentives and promotions. Review dealer inventories and “build” the car you want according to your specifications. Look up online car reviews from magazines such as Car and Driver, Motor Trend, and Road & Track.

2. Set a budget

When you know roughly how much the car you want will cost, think about what you can afford. Experienced buyers will know intuitively how much they want to spend, but less-experienced buyers should keep the 20/4/10 rule in mind: Put down at least 20 percent; finance for 4 years or less; and keep your monthly vehicle expenses—car payments, insurance, registration, fuel, and maintenance—at no more than 10 percent of your gross monthly income.

Lenders sometimes encourage car buyers to sign up for long loans—60 months or more—a good deal for them, but a bad idea for you. You’ll pay a lot more interest, and when you’ve paid off the loan, your car could be worth very little. You may even owe more than it’s worth.

You may also like: Now is a good time to refinance your car loan.

3. Contact your insurance rep

Tell them about the car you plan to buy and get a quote. Don’t make the mistake of discovering that it costs a lot more to insure your new car than you thought after you’ve signed the purchase agreement.

4. Arrange financing

Dealers often offer great interest rates—such as 0.9 percent for 72 months. But that doesn’t mean you’ll qualify for that rate. So arrange financing with a bank, credit union, or online source beforehand. Then you can compare it with the dealer’s offer or use it to negotiate a better deal.

5. Contact dealerships

Call 1 to 3 of the dealers who have the best prices and ask for the internet manager. Make sure the vehicle is available, inquire about financing, and get an out-the-door price. Do the same with the other dealers, then compare quotes.

Most dealers sell cars on a first-come, first-served basis. And no price is guaranteed until the dealer puts it on an official sales contract, which you should review carefully before signing.

All these steps so far can be done online or over the phone. At this point, decide whether you want to want to visit a dealership in person or negotiate for a car remotely. If it’s the former, ask the dealership what COVID-19 safety precautions it’s put in place for staff and customers; if it’s the latter, ask how to purchase the vehicle with minimal (or no) personal interaction.

6. Take a test-drive

A test-drive is one of the most important elements of the car-buying process. Contact the dealer that has your ideal car—the right price, color, and features—or one as close to it as possible. Tell them you want to take a test-drive and make an appointment so you know the car will be available. Many, if not most, dealerships will deliver a car to you for a test-drive.

As much as possible, drive the car in conditions that approximate the kind of driving you do most of the time—on the freeway, around town, in stop-and-go traffic. Find out whether you like the way the car drives or whether you have misgivings. You don’t want to lock yourself into a car that you don’t like to drive.

If you’re at the dealership, at the end of the test-drive, the salesperson will probably want to move toward closing a deal. Don’t let yourself be pushed into anything. Take your time.

It might be smart to thank the salesperson for their time, but also say that you need to think about it and that you’re considering other cars—all of which might be true. Employing this tactic signals that you’re not a pushover, and it might help you get a better deal.

Keep this in mind: Always be willing to walk away. There are plenty of great cars for sale. If you want to move toward making a purchase, make sure it’s your decision.

If you’ve taken a test-drive somewhere other than at the dealership, call or email the salesperson to indicate whether you’re interested in buying the vehicle.

7. Establish a trade-in value

Before reviewing an out-the-door price or negotiating further, establish a price for your trade-in, if you have one. This may involve some in-person contact, but again, ask the dealership to minimize it. They can probably send someone to your home or your workplace to evaluate the car. The main point is to keep the negotiations regarding your trade-in and your new car separate.

You may get a better price from a used-car outlet like CarMax, which buys used cars outright. By getting a second opinion, you can verify that the dealer’s offer is fair. If it’s not, you can sell your car yourself.

8. Finalize the deal

Again, this can be done in person or virtually. Review your contract. Take advantage of available rebates or incentives. Be alert when you meet—again, in person or virtually—with the finance and insurance folks, which happens after you’ve reached a deal with your salesperson. It’s their job to persuade you to add some “extras” to your monthly car payment, such as rustproofing, paint and upholstery protection, and extended warranties. Some of these items are of dubious value; others may be worthwhile but overpriced. Do research ahead of time so you’ll have a basis for comparison.

9. Take delivery of your new car

Congratulations—you did it! Pick up the keys to your new vehicle and drive it home—or have the dealership deliver it to you.

This article originally appeared in a slightly different form in the 2021 AAA Car Guide, published by the Automobile Club of Southern California. It was updated in October 2021.

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