The Covid pandemic likely sped up the auto industry’s evolution especially as it relates to online car shopping. Prior to the pandemic, the dealership website typically served as a resource for shoppers looking for prices on cars, available inventory and perhaps deals and incentives, too.
Shelter-in-place orders closed nonessential businesses, but sales were still necessary for economic survival. An online store presence was a necessity, and even car dealerships moved sales online. Two years post-pandemic, online car shopping is favored by many consumers and virtual buying options are numerous. How can consumers find the best online car dealer?
There are a few tips to find the best online options. Consumers can:
- Focus on local dealerships
- Shop via a larger online car company
- Order their car online and work through a local dealership
- Use a car query site that searches all the options
Focus on Local Dealerships
Depending on the brand of car that the buyer prefers, there could be many local dealerships that operate in large cities and even a few that are established in smaller towns. Those living in more rural areas might need to scope out the online sites of local dealerships that are closest to them.
While some local car dealerships offer a virtual shopping experience, not all of them will offer this option to consumers. Some might offer a hybrid online/in-store experience; consumers can shop online and interact virtually with the sales team, and they might even be able to apply for financing online, too.
However, car buyers might need to go to the dealership’s physical location to take a test drive and complete the paperwork for the sale. The legalities related to the car sales process also could vary per state.
The biggest benefit to online car shopping is that the customer remains in control during their search. Even if all the buying steps aren’t offered online and the buyer still has to visit the dealership to complete paperwork and/or arrange a test drive, they can use the dealership website to find the car they want without any pressure.
Local dealerships might offer their used and new inventory online. However, if consumers have a question about the availability of a vehicle, many dealership sites also offer a chat option that allows the consumer to reach out and talk to a member of the sales team (or someone from customer service).
According to the 2021 Cox Automotive Car Buyer Journey Study, consumers focused more on dealership websites versus third-party sites when the chip shortage impacted availability. As the shortage continues, the dealership websites might continue to be the most crucial resource for car shoppers on the hunt for a specific vehicle.
Buyers can have their questions answered and then keep browsing. In addition, the online experience also enables those shopping local dealerships to visit each dealership’s website on their own time and at their leisure. Consumers could open up multiple tabs to compare prices or deals between two or more local car dealerships.
Shop an Online Car Company
Some car dealerships only sell cars online. Examples include Carvana and Vroom. Typically, these online-focused car shopping companies sell used or pre-owned vehicles. They also buy cars and accept trade-ins.
How does the online-only shopping experience work? The process could vary by company. Typically, all steps of the buying process are handled online.
However, buyers might be purchasing a car sight unseen. While they could schedule a test drive or see the car before buying it, consumers that don’t see the vehicle before it arrives as their purchase should review the company’s return policy and other warranties, too.
For example, Vroom offers customers the option of returning the vehicle within seven days or 250 miles (whichever comes first). Customers have a full week or 250 miles to test out the vehicle.
While completing the full shopping process online might be appealing to those who don’t want to set foot in a dealership, others might not like the idea of buying a car without sitting in it or taking a test drive before it’s delivered. Buyers who purchase their vehicle through an online car buying platform also need to make sure they receive all the paperwork necessary to title and register their vehicle.
Order The Car Online and Work Through a Local Dealership
Car manufacturers don’t typically sell a car directly to the consumer. Instead, the consumer works with a dealership to buy a car.
While manufacturers might not sell a car directly, they could offer build and design resources online that let a consumer create their ideal car. Once they build their vehicle, the customer might be able to connect to a local dealership to order the vehicle.
Car brands also offer information related to any deals and incentives that are currently offered. However, consumers will be directed to contact their local dealership for more information. Some brands even have a search tool that lets consumers find their nearest affiliated dealership.
Use a Car Query Site to Search All the Options
Some consumers have no idea about what car they want or which car will best fit their needs. In this case, searching for a local dealership that might only focus on one major brand might not be their best option. Instead, they might need a resource that shows them all the options in their price range or that fits a certain set criteria.
There are many car query search sites that allow consumers to find new and used vehicles by price or by make/model. Car shoppers with a tight budget might only focus on the dollar amount of the vehicle; they might want to know which cars are in their budget so they can review all their options.
Car search sites might not let buyers complete the shopping process on the website, but some could provide tools related to financing.
RelayCars partners with TrueCar to enable buyers to find their ideal car; search for a specific make/model and enter the local zip code to see all the closest dealerships that offer the vehicle. Results also will include the price of the vehicle and allow consumers to get their offer.
Before Buying Online, Consumers Should Do This
Before buying a car online or even at the dealership, buyers should understand their budget and their credit score. Experts recommend allocating less than 10 percent of monthly take-home pay for a car payment, but those who have few expenses might be able to spend more per month on their car.
Buyers also should look at their finances to better understand how much money they can allocate for a down payment. New cars will depreciate quickly; in fact, they could lose up to 11 percent of their value just by leaving the dealership.
A down payment can help offset the impact of depreciation; a down payment that is too low could mean that the car’s value is less than the loan amount. In this case, the car would have negative equity and would be deemed ‘underwater’ in value.
Consumers also should have an idea about their credit risk or worthiness. Consumers can receive a free credit report every 12 months; however, the report will not show credit scores.
Sites like Credit Karma could let consumers view credit scores for free, though. These free scores might not mirror the scores seen by lenders, but the free scores can be used as a resource to understand credit health. Higher credit scores could lead to more favorable interest rates, while lower credit scores could be viewed as a higher credit risk.
Those who have a car that they plan to offer the dealership as a trade-in to help decrease the cost of their new purchase also should research the value of their vehicle. Sites like Kelley Blue Book (KBB) and National Auto Dealers Association (NADA) offer online tools that help consumers understand the trade-in value of their vehicle.
Using these resources to find the value of a car can ensure consumers know how much their car is worth and spot a bad offer from dealerships. Knowing a car’s value also can help car owners negotiate a batter trade-in.
However, car owners should be honest about the condition of their vehicle when using these valuation resources. Exaggerating the condition will only falsely inflate the value, but it won’t fool dealerships or lead to a better offer from them.
The Best Online Car Dealer
Car shoppers could have many options to shop for or even buy a car online. The best online car dealer should offer an easy-to-use site that lets customers find the car they want quickly and compare and understand prices, too.
Consumers might review buying options via local dealerships and look at companies that focus exclusively on online car buying/sales. Some consumers might want to complete the entire process online, while others could want to shop and research online but handle other aspects of the sale at the physical dealership.
The car buying experience might be different for every consumer. Some buyers might never want to go online to buy a car, while others might want to never set foot in a dealership. Consumers can explore all their options to simplify the car search and find the best price for their budget.