Yahoo Finance Is It Cheaper To Buy a Car Online or at a Dealership?
If you’re thinking about getting a car, you’re no longer limited to shopping in person at your local dealership. Now, you can shop around, compare prices, check reviews and buy a vehicle online. In some cases, you can even get your car delivered right to your door.
But will it save you money to buy a car online, or is it better to stick with a dealership? Like anything else, both options have their pros and cons. With a dealership, you have more negotiating power but may be pressured into spending more. Online, you run the risk of getting a vehicle you don’t really like — though you may be able to return it within a certain window.
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Before making your decision, here are the main advantages and drawbacks of getting a car at a dealership vs. online.
Online Sticker Prices Could Be Cheaper
Purchasing a vehicle online could be cheaper than buying one at a dealership.
“Compared to conventional dealerships, online vehicle purchase platforms often offer reduced overhead expenses, which may translate into cheaper rates for customers,” said Erin Kemp, consumer advocate at Bumper. “Online platforms, for example, may not have to pay for a big number of sales representatives or maintain vast physical lots, which allows them to pass those savings on to customers.”
Of course, you’ll still need to pay certain fees when shopping online. This could include delivery fees, taxes and service fees. Even if the sticker price is lower online, be sure to account for these.
“Always read the fine print,” said Kemp. “There can be some hidden costs, such as shipping or delivery charges — so it’s crucial to factor those into your overall calculations.”
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Car Dealerships Offer More Room for Negotiation
“Negotiating the price face-to-face is [a] perk of going the traditional route,” said Kemp.
When you’re face-to-face with a salesperson, you typically have more negotiating power than when you’re shopping online. This means you could get a great deal on a vehicle you love.
Online platforms don’t usually let you haggle for a better price. While this can be a good thing if you shy away from confrontation, it can also keep you from getting a better deal.
Buying Online Could Mean More Options — But Longer Wait Times
When shopping for a vehicle, do your research in advance of making the purchase. This can help you find the best deals and give you a better idea of what price points to expect.
According to Kemp, it’s easier for prospective buyers to quickly compare costs of vehicles across several websites than it is to shop around in person at different dealerships. Local dealerships may also only offer one particular brand — for example, a Honda dealer will usually only carry Honda vehicles. This can be limiting if you’re looking for variety.
On the other hand, major dealerships usually have an online inventory, as well. This means you can save time and still do comparison shopping without having to leave your home.
And if you need a car right away, a dealership could be the better option. “Dealerships often have a large inventory available for immediate purchase,” said Kemp. This can save you money on public transportation or car rentals as you look for a vehicle.
Less Pressure To Buy Online
When you shop online, you don’t have to worry about high-pressured sales tactics like you do at a dealership. This makes it easier to walk away from a potential vehicle, since nobody’s there to try to convince you otherwise.
“When you go to a dealer, they’ll often try every trick in the book to upsell you — not just on car features, but on extra extended warranties and other care packages,” said Kelly Conlin, senior marketing manager at Flexcar. “Dealers’ deceptive sales practices are widely written about across the U.S.
“When you get a car online, you can take the time to make the decision that’s best for you — without a pushy salesperson. And if you have questions, there’s always customer support available.”
If you do prefer an in-person experience, figure out what you want before you go. That way, you’ll be able to say no more easily if the dealer tries to upsell you on something you really didn’t need.
Knowing what you want and what’s available beforehand can also save you time at the dealership.
Dealerships May Offer More Incentives
Some dealerships also offer manufacturer incentives, like promotional financing options.
“Many dealerships have in-house financing options or partnerships with local lenders, which can facilitate the car financing process,” said Kemp.
Not all dealerships will offer these types of incentives, so ask about them beforehand.
Online Shopping Means No Test Drives
Part of making sure you choose the right vehicle for you is testing it out before committing to it. This is a lot easier to do when shopping in person at a dealership.
“They offer you the chance to test drive the car, something you can’t physically do when buying online,” said Kemp.
There are a few ways to get around this, however. For example, online platforms like Carvana offer a short return period. If you don’t like the vehicle you get, you can send it back — though this does mean you’ll potentially be without a car in the meantime.
Another option is to choose an online company that offers free test drives. CarMax, for instance, lets you test-drive any vehicle you choose for 24 hours. You don’t have to pay anything in advance, but there are a few rules you need to follow — like having comprehensive and collision insurance. There are also mileage restrictions.
Online Customer Support May Be Limited
This depends heavily on the company, of course, but your ability to speak with a live representative could be more limited when shopping online. This can be a good thing if you prefer a hands-off experience. But it can also be a drawback if you enjoy the hands-on touch.
Shopping at a dealership is “a blend of personal touch and tangible experience that many find reassuring — and may justify the potential for a slightly higher price,” said Kemp.
Bear in mind that dealerships can be busy. So, even if you do shop in person, you might not get as much one-on-one attention as you’d like.
Bottom Line
“Whether you’re leasing or buying, getting a car online gives you a better chance at not overspending,” said Conlin.
You might also find lower fees when shopping online, since online companies have less overhead to worry about. On the other hand, dealerships sometimes offer more incentives — as well as other perks — that can justify the potentially higher sticker price.
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This article originally appeared on GOBankingRates.com: Is It Cheaper To Buy a Car Online or at a Dealership?
