Buying Cars Online vs. Traditional Dealers: What To Know

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If you’re considering buying a car in this crazy vehicle market, one decision you’ll typically have to make if you’ve opted not to purchase from a private owner is to choose between buying a vehicle online vs. from a traditional dealer. As you might imagine, both of them have their pros and cons.

In this article, we’ll explore the differences between buying a car online compared to a traditional dealer and share some tips from money expert Clark Howard.

Can You Save More Buying a Car Online or at the Dealership?

The prices at a traditional dealership compared to an online vehicle marketplace are not that different right now for used vehicles or new cars. The average price of a vehicle right now continues to be elevated.

What is different, though, are the selections.

While the inventory issues that have plagued the car market over the past two years have largely gone away, Clark says automakers are now shipping their optioned-out, top-tier cars to dealers, who are overstocking them on their lots.

The problem with this is that most car shoppers aren’t looking for the latest and greatest vehicles with all the bells and whistles, which is creating even more of a pileup.

“You’ve got the higher interest rates to buy a vehicle, and you have the manufacturer shipping vehicles that are all optioned out and more expensive, and that’s causing a train wreck now for car dealers,” he says.

Clark says these pressures will only cause car prices to drop even more.

Until they do, Clark recommends that you hold onto the car you have – if you can. Don’t know where to start? Follow this simple maintenance guide to make your car last longer.

 If you can’t, here are some tips for buying at both a traditional dealer and online.

How To Buy a Car From a Traditional Dealer Right Now

There may be some people who are just more comfortable visiting a car dealer — and that’s OK. Clark wants you to go about the process with your eyes wide open.


Clark, who has bought a family car or two (or three), says it’s important that you be able to shop for a vehicle pressure-free. His advice is to check out the dealership after-hours.

“Look at cars when a dealership is closed, so there’s no salesperson to pressure you,” Clark says. “The best way to test drive a car is to rent it for a day or two. It’s the ultimate test drive.”

Compare Prices From Multiple Places

Compare prices by visiting several lots in your area.

“It’s ultra-important for you to comparison shop,” Clark says. If the dealer lots in your local area don’t have what you want, you may have to expand your search to find the vehicle for you.

When you find the vehicle(s) you want, Clark suggests you go to Consumer Reports to check out their car reliability ratings.

Now it’s time to talk to a salesperson.

Don’t Disclose Whether You’re Paying Cash or With a Pre-Qualified Loan

“If the dealer knows up front you’re paying cash, they’re not going to give you as good a deal on a car. Because they make a fortune on writing those loans,” Clark says.

Get Financing From a Credit Union, Not a Dealer

Clark says when it’s time to finance your auto loan, a credit union will typically have the best rates.

“The benefit of doing a credit union loan vs. going to your bank is the largest gap it’s ever been,” Clark says. “So you’re paying a massive amount more for that vehicle loan arranged at a car dealer.”

Don’t Agree To a Lengthy Auto Loan

“The longest auto loan you should ever take out is 42 months,” Clark says. “If you can’t afford the payment on a 42-month loan, then you should buy a cheaper car.”

Read up on Clark’s Maximum Auto Loan Rule.


How To Shop for a Car Online Right Now

Shopping online can allow you to easily customize your preferences in a seamless way without visiting car lot after car lot.

Here are some popular sites to buy cars online:

Another online option is the Costco Auto Program, which partners with local dealerships to facilitate the sale.

Read our guide on how to buy a car through Costco.

Clark particularly loves that many car-buying websites allow you to test drive vehicles for 24 hours to up to seven days. Clark says you can use that time to your advantage.

Get the Car Checked Out by a Mechanic

Getting a trustworthy mechanic to inspect the car you want before you buy can save you a lot of money down the road.

“If you buy from Carvana, CarMax or Vroom, you should have the vehicle checked out by a mechanic of your choosing during the period of time that you have the right to return the vehicle for a full refund,” says Clark.

Here are some more things to remember when buying a vehicle online:

Watch Out for Fees

Car-buying websites typically have options to deliver a vehicle to your door. Be mindful that this will usually involve an extra fee, especially if the vehicle is a distance away.

Turn Down Auto Financing

As is the case with traditional dealers, opting for auto financing with a car-buying website will sting your wallet.


“People are much better off to pre-qualify on their own at a credit union. If you’re not a member of a credit union, join one,” Clark says. The loan will be substantially cheaper than it would be through Vroom, Carvana or CarMax.”

Buying a Car Online vs. Traditional Dealership: Pros and Cons

Shopping at Dealership

You get to test-drive and experience the car fully.Shopping in person can be time-consuming and exhausting.
You get the benefit of talking and negotiating with the car salesperson.You can avoid the hot or cold weather, which could ruin the experience.
You may find similar models on the lot that you like.High-pressure salespeople may be an issue for you.

Car Shopping Online

More vehicle options available.Lacks the in-person touch.
Convenient and saves time.It’s typical to incur a shipping fee based on distance.
You won’t have to worry about haggling over price.Limited customer service options compared to dealer salesperson.

Final Thoughts

Because price will be a primary factor when it comes to buying a vehicle, Clark wants you to push back if you notice any junk fees when dealing with a traditional dealer or online marketplace.

Remember to compare prices across multiple websites and dealerships. When it comes to car-buying sites and apps, pay particular attention to any promotions being run, which could allow you to save money.

Read our guide on the best car-buying services for your money.