How To Buy a Car Online: Step-by-Step Guide
Written by
Taylor Milam-Samuel
Edited by
Elizabeth Constantineau
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Buying a car online might feel unconventional, but it’s quickly becoming the norm. With the right tools and a clear plan, you can handle almost every step from home — from comparing prices to securing financing to scheduling delivery. This guide walks you through how to buy a car online with confidence and ease.
How To Buy a Car Online: 5-Step Guide
You can buy a car online — and with the right prep, the process can be surprisingly simple. Here’s how to do it step by step.
1. Set Your Budget and Determine How Much You Want To Spend
As with any major purchase, setting your budget is the first step in buying a car online. There are several factors to consider:Â
- Value of your trade-in: Get an estimate of what your current vehicle is worth to reduce the cost of your next car.
- New vs. used car: New cars usually cost more upfront but come with full warranties and the latest features.
- Down payment: Putting more money down can help reduce both your monthly payments and total loan costs.
- Estimated financing terms: Decide how long you want to finance the car and what monthly payment fits your budget.
2. Check Your Credit Score
You can get a free copy of your credit report every 12 months from each of the three credit reporting companies: Equifax, Experian and TransUnion.
If you find out that your credit score is on the lower end, you might want to wait to buy a car. You can take steps to improve your credit score, which will help you qualify for a better rate.
3. Get Pre-Approved for a Loan
It’s always a good idea to shop around for the best and cheapest loan terms. You can check rates from multiple lenders with a soft credit pull to compare offers.Â
Once you get your pre-approval letter, you can continue comparing rates with the dealership or online car retailer after you pick a vehicle.Â
4. Conduct Research
Several reputable sites can help you pick the best type of car and learn about pricing, including the following:
- Kelley Blue Book: Ideal for vehicle pricing, trade-in values and consumer reviews.
- Edmunds: Features in-depth expert reviews and pricing guides.
- J.D. Power: Provides annual ratings that evaluate cars based on factors like quality, reliability, performance, design and resale value.
5. Decide on a New or Used Vehicle
Choosing between a new and used car is a very personal decision, so you’ll need to weigh the pros and cons that are most vital to you.
If you’re trying to stick to a budget, a used car can be more affordable. However, new cars tend to have fewer mechanical issues and a factory warranty.Â
You also want to decide between leasing vs. buying. Leasing may offer lower monthly payments, but buying could be the better long-term value if you plan to keep the car for several years.
Good To Know
You can complete most of the car buying process online — including research, financing and even arranging delivery. However, depending on your state, you may still need to sign paperwork or test drive in person before it’s official.
Best Online Car Buying Sites
There are several online companies that make it possible to buy a car entirely from your computer or phone. Sites like Carvana and CarMax offer a wide selection of vehicles, financing options and trial periods so you can take a test drive before fully committing.
Just keep in mind, that most companies won’t refund shipping charges — so the free trial may come with a cost if you return the vehicle.
Here’s how some of the top online car-buying platforms compare:
| Feature | Carvana | CarMax |
|---|---|---|
| New vs. used options | Both | Both |
| Delivery availability | Carvana location or your home | CarMax store or your home |
| Test drive | Yes | Yes |
| Trial period | 7-day money back guarantee | 10-day money back guarantee |
| Best for | Extensive options | Generous trial period |
| Advantages | -Low delivery fees -Wide selection |
-Longer trial period -Free shipping within 60 miles |
| Disadvantages | Might be able to find a better price somewhere else | Fewer vehicles available |
How To Buy a New Car Online From a Dealership Â
Most dealerships have an option to buy online. It can help you save time, but you typically have to pay a pricey delivery fee. Here’s how to buy a car online from a dealership in three simple steps.
1. Check Out Multiple Dealerships
To make sure you’re getting the best price, you should shop around with a few dealerships. While the dealership closest to you might have the vehicle you want, one that’s a little farther away could have a better price on the same car.
2. Connect With the Internet Sales Manager
If you know the car you want to buy and the dealership you want to work with, it’s time to chat with the internet sales manager. The sales manager exclusively works with online sales, so you can tell them what you’re looking for and negotiate the price.
3. Ask About Fees
Once you settle on a price, be sure to ask about delivery options and extra fees.
Remember, dealerships charge a delivery fee, and it’s usually quite expensive. Make sure you understand the cost and are comfortable with the payment.  Â
Pros and Cons of Buying a Car Online Â
Buying a car online can be a great way to get a good deal and avoid a lengthy trip to a dealership. But it’s not the right option for everyone. Here are some potential benefits and drawbacks.Â
Pros
- Complete most of the process at home
- Car-buying sites offer money-back guarantees
- Save time
- Easily compare vehicles and pricing
Cons
- Shipping and delivery fees
- Still need to sign paperwork in person
- Harder to test-drive Â
Common Mistakes To Avoid When Buying a Car Online
It’s often easier and less expensive to buy a car online, but it’s important to avoid these potential pitfalls.Â
- Forgetting to test drive
- Not getting preapproved before shopping
- Spending more than you can comfortably afford
- Choosing a non-reputable company
- Not looking at vehicle history reports Â
Final Takeaway: Is Buying a Car Online Right for You? Â
Whether buying a car online is the right for you depends on your preferences and comfrot level with handling most of the process digitally. If you’re comfortable making decisions online, this can be a convenient and cost-effective option, saving you both time and money. However, if you prefer to test-drive and sign paperwork in person, online buying might not be the best fit for you.
Buying a Car Online: FAQ
The answers to these frequently asked questions can help you decide if buying a car online is the best option.- What is the best site to buy a car online?
- Carvana and CarMax are two of the most popular sites for buying cars online.
- You can also work with a dealership to buy a car online. If you work with a dealership, you can select one locally or far away.
- What is the 20/4/10 rule for buying a car?
- The 20/4/10 rule is a financial guideline for buying a car.
- It states that you should have a 20% down payment and a 4-year repayment term. You also shouldn't spend more than 10% of your gross income on a monthly car payment.
- Can I buy a car online?
- You can complete most of the car buying process online, but you need to sign paperwork in person. It's usually the last step and pretty quick. Most states require in-person paperwork to protect consumers.
- What is the safest way to pay for a car online?
- The safest way to pay for a car online is to work with a reputable company and pay with a credit card. Never use a wire transfer or cash. Whether it's a car sale company like Carvana or a local dealership, make sure it's a reputable company and read the contract's fine print.
Jennifer Taylor contributed to the reporting for this article.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- Better Business Bureau. 2020. "BBB Tip: Buying a used car."
- Car and Driver. 2023. "Should You Buy a New or Used Car?"
- Kelley Blue Book. 2023. "Car Dealer Incentives Defined."
- Forbes. 2022. "What Is An Auto Loan Preapproval? And How To Get It."
- Experian. 2023. "What Credit Score Do I Need for an Auto Loan?"
- State of California DMV. "Car Buyer’s Bill of Rights."
