Could Buying Your Next Car Online Save You Money?
And then, of course, there’s the purchase price of the car itself. While it’s possible to buy a used car directly from a private owner, many Americans head to a local dealership when it comes time to purchase or trade in a vehicle. In fact, 54% of consumers say they’d buy from a dealership that offers their preferred experience — even if that dealer didn’t offer the lowest price. For some, the peace of mind offered by a dealership is worth paying a bit more. But do you really have to choose between keeping costs low and feeling confident in your purchase?
If you’re in the market for a brand new vehicle, buying directly from a dealership is still your only option. But if you’re in the market for a used car, you have more choices at your disposal. Sure, you could go to a dealership in your area or take a chance on a Craigslist ad. But there’s actually another option: you could buy it online.
These days, you can get just about anything through the internet. You can even buy replacement parts for your vehicle — and often do so for a steal. At the retail counter, a trim piece that costs maybe $5 to make could carry a 5,000% premium. Online stores, on the other hand, typically have lower premiums. But does the same concept hold true for buying a vehicle over the internet?
Take Carvana, for example. You’ve probably seen commercials for their vehicle vending machines on television, featuring promises of no-haggle buying and doorstep delivery. The convenience that Carvana promises is certainly enticing, but whether you’ll actually save money when you purchase a car through their site isn’t necessarily a sure thing. Because there’s no haggling on price, what you see on the price tag is what you’ll pay. In some cases, that might mean paying a bit more than what you’d find with the same make and model elsewhere; in others, the sticker price might be a bit less. And depending on where you live, you may have to pay extra for having your car shipped to you. That can add on quite a bit to the final price and potentially negate savings you might otherwise enjoy. You might also not benefit from a wide range of financing options when you purchase a car online, which could make a big difference in how much you pay per month or how long the terms of your loan will be.
That said, data shows that you can actually save some money when you buy a car online. Carvana itself estimates that buyers could save an average of $1,889 by using their site instead of going to the dealership. And because Carvana has a pretty expansive inventory, you might be able to find the exact car you’re looking for, with all the bells and whistles, for a lower price than you’d be able to get at a traditional dealership. Carvana isn’t the only online dealer to provide savings, though. Vroom, another online car dealer, says they can save buyers an average of $2,545 on their vehicles. And in a recent study conducted by iSeeCars.com, it was revealed that consumers who bought their cars online saved $185. That might not seem like much, but some car models yielding even higher savings. Models like the Chevrolet Silverado 1500, the Ford Edge, and the Toyota RAV4 provided anywhere from 5.7% to 6.6% savings when purchased online, compared to dealership prices.
Of course, there are drawbacks to purchasing a vehicle online — and not being able to test drive before buying is one of the biggest. You can certainly test drive the same vehicle at a local dealership (and Carvana provides you with at least a week to drive your new vehicle before you aren’t allowed to change your mind). But the experience is definitely a bit different and some consumers aren’t willing to take that chance. However, the upside is that you won’t have to spend several hours waiting around at the dealership. Since time is money, that kind of savings is attractive for some buyers. The flip side? Getting your car delivered will typically take longer than being able to buy your car from a dealership and drive it home within a couple of days. Really, it’s all about your priorities.
Ultimately, the answer is buying a car online can potentially save you some money — assuming you do your research first and buy the right model. It’s not necessarily a foolproof way to save, of course, but it can be a great option for someone who wants to avoid the dealership at all costs.