5 things you need to know before buying a car online
Buying a new car is an exciting event, but often times the process is the part most people dread. In recent years, going through the car-buying process has become easier and more consumer-friendly. In fact, many car dealers are offering shop-at-home experiences and online delivery service.
Yet, even with all the new technology and a seamless process, there are a few things you should consider before buying a car online.
Cash, lease or finance?
There are a few ways to pay for a car, the most common options being financing, leasing or purchasing with cash.
Each option has its advantages and drawbacks.
If you choose to finance your car as most consumers do, this means that at the end of your loan, you will own the car outright. It also means that you can make a cross-country trip every month without worrying about the mileage or sell your car whenever you want, even before your loan is paid off.
However, there are a few downsides to financing. You will usually end up with a higher monthly payment, as opposed to a lease, and you will be making that payment over a longer period of time (often five or more years). You also might need a bit of money upfront for a down payment, sometimes as much as 10 to 20 percent of the purchase price.
One of the biggest incentives to leasing is the fact that you can get a nicer car for less money. Monthly lease payments tend to be smaller than monthly finance payments, meaning you can fit more car into your budget, and leases usually require less money up front, sometimes as little as nothing. If you like having a new car every few years and like having the most advanced safety features, then leasing a car is probably better for you.
The downsides to leasing include mileage restrictions — typically 15,000 miles per year or less — you can’t make any changes to the car and you don’t gain any equity while making your lease payments.
- Paying with cash
While this is certainly an option, it is definitely one of the lesser-preferred options due to upfront cash needed. Overall, you’ll end up paying less for your purchase but most people prefer to have easy access to their money, especially if they don’t have an emergency fund.
Most of all, it’s important to do your research and be willing to negotiate the price of the car and the down payment, whether you’re financing, paying cash or leasing.
Know your current car’s value
Knowing your current car’s value is key to getting a good deal on it before you buy another vehicle, whether you sell it privately or trade it in at a dealership. Unfortunately, there isn’t just one valuation tool used in determining value but the most common sources are Kelley Blue Book (KBB) and the National Automobile Dealers Association (NADA).
Find the right car
There has never been a better time to find the right car. Take your time and read or watch multiple professional and owner reviews of cars. The online car culture is a robust and passionate place, where a few Google or YouTube searches will bring a host of reviews to aid in your decision-making process.
In fact, many car review sites, like Autotrader.com, have search options available for you to view reviews on cars that will factor in your desired specifications, such as fuel economy, seating, budget, and space.
Determine the price you are willing to pay
With MSRP (manufacturer’s suggested retail price) and dealer invoice prices (what the dealer paid the manufacturer for the car) listed on multiple reputable sites like NADA, Edmunds, and Truecar, reputable dealers are more willing to be upfront and transparent about their prices.
Know these prices going into the negotiation process and stay true to the price you want to pay.
Pro tip: Extra fees and options can add to the overall price of the car. Make sure to know these charges up front to avoid exceeding your budget.
Are returns possible?
Even with all the resources that are available to help you research your new car, it still is possible to get into something you don’t like. If you feel yourself wavering during the decision-making process, you may want to ask about the dealership’s return policy.
Taking back a car is rare, but it’s still worth asking about.
The car buying process has come a long way from the early days of purchasing a vehicle. With so many options, the process may seem a little overwhelming without some help. Finding a trustworthy dealership to help make suggestions on what kind of car might fit your lifestyle is an important part of the buying process. Take the time to do the research to find the right match for you.
*Sanderson Ford has perfected the online car-buying experience. Reach out to them today to start your no-pressure online car-buying experience.