Buy a Car Online — for Less

Updated on March 11, 2008.

THESE DAYS, THE BEST way to purchase a new car might be to skip the dealership and head online.

Just ask Richard Harrel. The 49-year-old Acworth, Ga., resident had no luck looking for a Toyota Tacoma at his local dealerships. Dealers either didn't have the model he wanted or offered more bells and whistles than he needed. And the prices were steep, says Harrel.

At his mother's urging, Harrel decided to check out auto web site CarsDirect.com. He quickly found he could get the truck he wanted, at a very competitive price, with no haggling or high-pressure sales pitch. Within a few weeks, Harrel received an email notifying him that his Tacoma was ready for pickup from a local dealership. "It was one of the same dealers I had already talked to but wouldn't work with me," says Harrel.

According to Edmunds.com, an auto web site, nearly 30% of automotive transactions are now conducted online. While the advantages might not seem obvious at first, auto experts agree that shoppers can save time and money by going online. Perhaps more important, the entire process is a lot more pleasant: No more wrestling with tough sales teams.

You can purchase new and used cars online. People who've purchased new models say it's remarkably easy. Most sites will forward your request for a free quote to a dealership's Internet sales department. These people make their commissions based on volume rather than price, says Mike Hudson, an automotive expert with Edmunds.com. They understand the importance of offering a fair price to move the sales process along quickly.

"We've walked into a dealership and offered $500 over invoice on a particular car and got laughed off the lot," Hudson says. "We then contacted the Internet manager and got the deal we wanted."

Those looking to purchase a new car online typically field multiple offers at a time — a detail not lost on the dealerships. They know that if they want your business, they'll have to offer you a competitive price. Of course, there's always the opportunity to try to haggle it down even more.

In addition to the sales price, you can work out all the smaller details online as well, including aftermarket products (like rust proofing and extended warranties) and financing. (Auto experts always recommend lining up your financing with an independent lender. Read our story for tips on how to do this.) By arranging everything upfront, you can all but avoid the finance-and-insurance manager. These are the best salespeople in the business, and can squeeze an extra couple of hundred dollars out of almost anyone.

There are also plenty of sites that deal with used cars, which we'll detail below. Ready to give online car buying a spin? Here's how to do it right.

Start Off the Old-Fashioned Way
As glorious as the Internet is, there are some things it can't offer, like a first-hand experience of how a particular model handles. So as soon as you know which model and features you're interested in, go down to your local dealer and kick the tires. Take the car out for a test drive and make sure you love it.

The Price Is Right
Once you've read all the reviews and taken your future car out for a test drive, it's time to research prices. On sites such as Edmunds.com and CarsDirect.com, you can compare the sticker price with the invoice price, and also see if the manufacturer is offering any incentives. Edmunds.com also provides users with the True Market Value of every vehicle on the market. This is an average price for what other consumers in your area are paying. You shouldn't have to pay more than this. If buying a used car, the industry standard for pricing is Kelley Blue Book.