December 9, 2023

Car Auto Finance

Car Auto Finance FOR Everyone

How to Buy a Car Online in 2023

If your old car has served you well and you’re considering trading it in, you may be wondering if buying a car online is the right choice. Fortunately, shopping for a new vehicle on the internet is both convenient and simple, and it’s also become more common thanks to digital car-buying services like Carvana and CarMax. Here’s a step-by-step guide for how to buy a car online. 

1. Create a Budget

Whether you opt to buy a car online or in person at a dealership, it’s essential to create a budget beforehand. Consider how large of a down payment you’d like to make, the monthly loan payments you can afford, and other expenses like taxes and insurance costs. Use our auto loan calculator to get insight into how different down payments and rates will affect your monthly payment; if you have a trade-in, include the value as part of the down payment. 

Thinking ahead about maintenance costs is also wise, as maintaining and repairing a car can be costly. According to data from Kelley Blue Book’s parent company Cox Automotive, consumers pay an average of $548.32 at the mechanic every year (but some makes and models end up being much more expensive). While your repair costs may not be that high with a new vehicle, it’s still important to keep these expenses in mind as you’re budgeting for a car. 

2. Review Your Credit

Your credit will also impact the cost of your auto loan, as better credit tends to result in lower loan rates. If you haven’t checked your credit in a while, review it before you shop for a loan. You can review your credit reports for free at, though those reports won’t include your credit scores. Other services, like Credit Karma, Credit Sesame, and let you check your credit scores for free. Your credit card issuer’s online portal may also give you free credit score access. 

If your credit isn’t great, it can be helpful to have realistic expectations regarding your potential loan rates; you may want to explore auto loans for bad credit or auto loans for fair credit. On the other hand, if you have excellent credit, you can seek out lenders that offer the lowest rates available to save as much money as possible.

3. Research Cars

Once you understand potential costs, it’s time to research cars to find one that suits your budget, needs, and preferences. Besides vehicle features and appearance, consider factors like reliability and average maintenance costs as you narrow your options. 

Understanding the type of car you want can help save you time and hassle when you shop. Plus, you’ll have insight into expected sale prices on the cars you’re considering, which can help you determine if the car-buying service offers fair prices. 

4. Get Pre-Approved for an Auto Loan

After you’ve found a vehicle you’d like to purchase, getting pre-approved for one or more auto loans is a good next step. Getting pre-approved with a few different lenders can help you understand the rates and loan amounts you’re likely to qualify for. You can then opt for the lender offering the best rates and terms for your situation. 

Although most dealerships will be happy to let you apply for a loan through their own partner lenders, third-party lenders may offer better rates or terms than you’d find at a local dealership or online car-buying service. Rate shopping is the only way to find the lowest possible rate and save money. 

However, pre-approvals will usually result in hard credit inquiries, which can hurt your credit score slightly. To minimize the impact of these inquiries on your credit score, aim to complete your loan shopping within a two-week period. The FICO credit score model, which is commonly used by lenders when evaluating prospective borrowers, will count multiple hard inquiries as one if you shop within a 14-day window (or longer windows, for certain FICO score versions).  

If you only plan to use the vehicle for a short time, leasing could be a more affordable alternative to buying a car. Generally, your monthly payments with a leased vehicle will be slightly cheaper, and there’s usually no need to make a down payment. But there are fees and potential penalties associated with leasing, so weigh the pros and cons to see if it’s right for you. 

Compare the Best Auto Loan Rates

Lender APR* Loan Amounts Loan Terms
AUTOPAY As low as 2.99% $2,500–$100,000 2–8 years
Consumers Credit Union 5.54%–9.04% $500–$350,000 1–7 years
LendingTree As low as 2.24% $5,000–$150,000 1–8 years
LendingClub 3.99%–24.99% $5,000–$55,000 24–84 months
PenFed Credit Union 5.19%–17.99% $500–$150,000 3–7 years
Carvana Not disclosed Not disclosed Not disclosed
OpenRoad Lending 1.99%–24.99% $7,500–$100,000 2–6 years

If you’ve examined your budget, checked your credit, and researched some vehicles, it might be time to start loan shopping. Learn more about our top auto loan lenders to see why they’re the best.

5. Explore Local Dealerships and Online Retailers

You can shop online for a car through many local dealerships’ websites and online retailers. Compare options from businesses nearby and sites like CarMax, Carvana, TrueCar, AutoTrader, Kelley Blue Book, and 

Keep an eye out for possible deals and discounts as you shop, including cash rebates, low-interest financing, and holiday sales. Certain times of year tend to be better than others for car shopping, like the end of the month, quarter, or year; you may find better deals on used cars at the beginning of the year, as well.

6. Inspect and Test-Drive the Vehicle

If you opt to buy a car online, it may be local or several hundred miles away. Read vehicle descriptions and specifications thoroughly and inspect the images provided. Most companies allow you to inspect and test-drive a local vehicle, but this process can be more complicated if your car is a significant distance away. Some services will require you to come to the vehicle for a test drive, while others will deliver it to your home.

CarMax allows you to test-drive a vehicle for 24 hours, an exceptional offer when most test drives last 15 minutes or so. Carvana doesn’t allow a typical test drive, but if you decide to make a purchase, you’ll get a full seven days to decide if you really like the vehicle; if you don’t, you can get a full refund.

If you’re buying a used car, it’s also wise to request a vehicle history report to verify the car’s condition, accident history, and ownership details. You may be able to do this through the car-buying service itself. If you can’t see the car in person before purchasing, you may want to arrange a virtual video call so you can do a real-time inspection of the car’s exterior and interior.

Browse a variety of car-buying websites and review sites (including YouTube) to find digital walk-throughs, demonstrations, and reviews of the make and model you’re interested in.

7. Negotiate the Price

Online vehicle negotiations can be less stressful than in-person negotiations, so buying a car online may be a more comfortable process. It may be easier to ask dealers to beat your best offer, and to walk away if you’re not getting a good deal.

Compare prices from different local dealerships and online sellers, and make note of any differences in cost. Doing so can give you some valuable leverage for possible negotiations. For instance, if Carvana offers a better price than your local dealership, you might see if your dealer is willing to meet or beat that price in order to earn your business. There may be more wiggle room in the price than a good salesperson will let on.

Negotiating a vehicle’s purchase price is tricky, and there are many differing opinions on best practices. Read more about how to get a great deal on a new car or a used car.

8. Close the Deal

Once you’ve found a car, it’s time to close the deal. But before you sign a contract, carefully read the terms and conditions. There may be additional fees or service charges you didn’t expect. Depending on the online dealer you used, you may need to finalize the paperwork for your new car at a local dealership; if so, bring your finalized pricing information, trade-in information, and pre-approved loan information or offer to the dealer’s financing team. 

Online car-buying sites may have their own financing processes. For instance, Carvana lets you select third-party financing as an option when you reach its online payment page. You can then select that option and enter the information from your lender to move forward.

No matter where you’re buying your car, be prepared to provide a valid driver’s license, proof of insurance, and copies of any financing or leasing agreements to your dealer or online seller. 

9. Take Delivery of the Car

Depending on where you buy your car, you may be able to pick it up at the dealership or have it delivered to your home or office. Inspect your vehicle once more when you pick it up or upon delivery. 

Ask about potential delivery fees if you plan to have your car delivered to your home or office. Some dealers may charge a flat rate or per-mile fee for this service. 

Once you receive your new car, you’ll need to register it (if the dealer hasn’t done so already) and you may need to get license plates from your local Bureau or Department of Motor Vehicles. Many states offer a 30-day window to get your new car roadworthy, but some states may have shorter grace periods. 

How Long Does It Take To Buy a Car Online?

The length of time it takes to buy a car online depends on your situation and the vehicle you want to purchase. For instance, if you know which vehicle you want to buy, where you want to buy it from, and where you plan to get financing, the process could be fairly quick. But if you don’t have this information yet, it may take a week or more to figure it out. Once a decision or purchase has been made, the delivery or pickup time depends on the particular service you’re using.

Where Can You Buy a Car Online?

You can buy a car online through many local dealerships and online car-buying sites like CarMax, TrueCar, and Carvana. Compare options from different retailers to find the best prices available.

Can You Buy a Car From a Dealership Online?

Yes, many dealerships allow you to start the process of buying a car online. You may even be able to secure financing and negotiate with an online team instead of taking these steps in person. But even if your dealership offers these options, you’ll likely need to visit the dealer to finalize the purchase. Having a trade-in vehicle could require you to visit the dealership as well.

Is It Safe to Buy a Car Online?

It’s generally safe to buy a car online if you purchase a vehicle from a reputable dealership or car-buying site. Always do your due diligence before you share your personal information or sign a contract with a seller, including requesting or buying a thorough vehicle history report.

Is There a Fee If You Buy a Car Online?

Depending on where you buy your car, a flat-rate or per-mile delivery fee may apply. Ask your seller about potential fees before you finalize your vehicle purchase. Other than that, you may be asked to pay many of the same fees you’ll pay when buying a car in person, such as documentation and title fees.