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Buying a Car Online: Considerations for Making a Smart Purchase

If you're like most Americans looking for a car, you're probably browsing online. Some websites now have services that allow you to circumvent car dealerships completely. If you're thinking about buying a car online, here are some considerations to keep in mind.

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How to start shopping for a car online

The easiest and most common way to shop for used cars online is to use third-party websites. Sites like Autotrader, Carvana,, CarMax, CarGurus and others offer prospective buyers the widest options. Buyers can search based on preferences such as make and model, year, color, mileage, zip code and distance radius to the buyer's geographic location.

Once choices are narrowed down, this is traditionally the time when prospective buyers head to a dealership or third-party sales location to complete the purchase in person. However, with online car sales, this in-person step is not always necessary. Some dealers will allow you to call or email to close the deal. You could then pick up your car or opt to have the car delivered to your residence.

Options for checking vehicle quality online

For some car buyers, there's no replacement for seeing a car in person, visually inspecting the vehicle and completing a test drive. Other buyers, however, may prefer to complete the process virtually. It is still possible to check vehicle quality and minimize the risk of fraud when purchasing a car online. These are some steps to consider:

  • Step 1: Verify vehicle history. Obtain the Vehicle Identification Number ("VIN number") and run a car history report via a vehicle reporting agency like Carfax or AutoCheck. Negative historical events that could impact car value and vehicle reliability will be included in the report. A vehicle history report will include:
    • Maintenance Records
    • Number of owners
    • True odometer reading
    • Accidents
    • Storm/flooding damage
  • Step 2: Consider return windows and purchase guarantees. If the historical report shows a clear record and title, you may be ready to move forward with a purchase. One additional consideration at this stage is whether a seller or dealership offers a guaranteed return and refund window. As an example, the dealer Carvana has a 100 day/4,189 mile "Worry-Free Guarantee" window and a "7-day Money Back Guarantee." If you're unable to test-drive a car prior to completing the purchase, a guaranteed return window can offer valuable peace of mind.

Consider delivery and pickup options

Online automation is minimizing the need to interact with used car dealers, making negotiations more comfortable and saving hours of time. Online shopping offers further benefits, saving time with new pickup and delivery options.

However, there may be financial strings attached. For example, some all-inclusive vehicle services attach additional fees to the closing process. These fees may be automatic for the delivery of your vehicle. Check the fine print and consider whether an in-person pickup could reduce your overall purchase cost.

Some dealers will deliver the car to your door. In that case, you'll likely need to sign a few short documents in person and may need to pay a small delivery fee. However, this will save you significant time and minimize uncomfortable upselling that might be encountered at a dealership.

Protect your investment with the right auto insurance

Before you finalize your paperwork, contact your insurance agent. Your independent insurance agent can help you determine the right coverage needs for your vehicle and lifestyle.

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