How to Buy Cars Online
Whether they are in the market for a new car or a used one, chances are good that most car buyers will be able to buy cars online. The internet is a powerful resource and has changed the way millions of people do things, including shopping for cars. But researching a big ticket item like a car online is one thing. Actually finding the car you want, closing the deal and arranging delivery of your new vehicle is another question. These days, the answer is yes for both new and used vehicles. Many buyers and sellers have successfully completed vehicle transactions online. With careful planning, attention to details and research, it can be done successfully.
Just like any major purchase, the first thing to consider is how much you can afford and how will you pay for it. If you plan on financing your new vehicle then this may limit your search to dealers only. Some banks and finance companies understand that buyers may purchase their vehicles from private sellers and will make arrangements to pay the seller directly. Some will provide funds directly to the buyer to pass on to the seller. However your financing company decides to do it, keep a careful eye on the interest rates as they will tend to rise slightly for private sales. Using the internet to shop for auto financing is very helpful and should be used by any buyer to find the best and most flexible deal to suit his or her needs. A good place to start your search would be at CarsDirect. Click on the finance tab and you will have a list of financing options at your finger tips. You will also find a loan calculator to help you determine your payment comfort zone and an insurance search tool if you are in the market for vehicle insurance.
THE INTERNET SEARCH:
Searching for a new car online can be an exciting experience. But like driving from dealership to dealership, it can get a bit overwhelming. Utilizing a website that has intelligent search options can be very useful. Websites such as CarsDirect and Autos.com are two such websites that have search tools that allow a buyer to search by vehicle make and model or by vehicle type. Both searches will also give the buyer an education as to what options are available on a specific model plus valuable insight as to pricing as well as user and expert reviews. For buyers who are open to buying from private sellers, a search of eBay or Craigslist can be useful.
During your search, you will likely find cars that are outside your local area. Deciding whether or not to pursue these vehicles depends on what inventory you have nearby. Remember to take into consideration extra expenses such as shipping and personal travel expenses for this type of purchase. Although it is possible to buy a car sight unseen, this is typically only an issue when shopping for uncommon or classic cars. If you have your heart set on a car that is not readily available in your area, please pay special attention to the Inspection and Payment paragraph.
Another important tool to utilize courtesy of the internet is CARFAX. This is a wonderful tool that allows the user to input the VIN (Vehicle Identification Number) to view a vehicle's history. It is not a free service but it is money well spent. CARFAX reports will tell you if the car has been in any accidents, stolen and give the purchaser the complete title history. There is even a section that lets the buyer know if the odometer has ever been tampered with, as well as any factory recalls, warranty info and smog test results if applicable. A CARFAX report will even let you know if the airbags have ever been deployed. Once you have narrowed down your search, take the time to go to CarFax to complete your research. This service is only useful for researching vehicles from 1981 or newer. Vehicles with VINs of less than 17 digits will not work on this system. Unfortunately, all you classic car buyers will have to do it the old fashioned way.
INSPECTION AND PAYMENT:
If the car you have chosen is local to where you live, then you will have the convenience of just arranging an appointment with the seller to view, inspect and test drive the vehicle. Inspecting the vehicle starts the moment you arrive at the vehicle location. Note how the vehicle sits at rest and take note if it's leaning in one direction. Look for fluid leaks, dents, signs of body work, paint fading, etc... If the vehicle is not local to you, there are a few companies that offer inspection services for automobiles. An internet search will provide the names of companies that provide such services. SGS is a reputable firm and they stand by their inspections. While having a third party inspect your vehicle may sound strange to some, consider this. If you are not a mechanic or even mechanically inclined, the time and money spent on traveling to view the vehicle might be better spent on having a professional give you an unbiased opinion of the car's condition.
In either scenario, be prepared to supply a down payment in the event the car is everything you had hoped for and you would like the seller to hold the car for you. If the seller happens to be a car dealer, then the process of buying and registering the vehicle will be much simpler for the buyer. However, this is in no way an attempt to deter any buyer from purchasing their next vehicle from a private seller. Many of the best deals can be found by buying directly from the end user/owner of the vehicle. A little research and preparation on the part of the buyer can translate into significant savings. Once you have determined that the seller is in possession of the vehicle title, you can proceed with the paperwork. Items that are a must have when conducting a transaction with a private party are as follows:
- Bill of Sale: This should be for the state that you will be registering the car in.
- Seller Warranty: If there isn't any, there is a box to check for that as well
- Odometer Disclosure: Buyer protection. This verifies that the mileage shown is the actual mileage.
- Receipt: Keep a record of the deposit should you decide to buy the vehicle
- Addendum: A great place to add any stipulations between the buyer and seller.
All of these forms are readily available on the Internet. If the seller is not in possession of the title, i.e.: car is not paid off and the finance company is holding the title OR there is a lien on the title, this will complicate the sale. It is not a deal breaker, but a subject that could be another article in itself. So always verify that the seller has a clean, clear title to the vehicle.
Once an agreement has been reached between buyer and seller, it will be time for the buyer to produce payment in full in order to take possession of the vehicle. This will vary depending on the type of seller as I discussed earlier but I did not mention how this process will work for the long distance buyer. Again, when working with a seller who is also a dealer simplifies this process. Dealers not only have the resources to close transactions, but the experience as well. The situation tends to get complicated when the seller is a private party and has limited experience in vehicle transactions. The seller is naturally hesitant to ship the vehicle without payment and the buyer is reluctant to part with hard earned or borrowed money without having the car. Who will bear the risk? It is in these five words where many deals fall apart between private buyers and sellers. The answer is to limit the risk and what risk is left is to be shared equally between buyer and seller. This is accomplished by using an escrow company. This has become a very popular and safe way to complete vehicle transactions and yes, you can find an escrow company online.
This section will most likely apply to buyers who have purchased a car that is outside of their local area. There is no shortage of car haulers and a quick search on the internet will produce many results. Make sure they service the pickup and delivery areas you require. Also, ask if there are any limitations as to what types of vehicles they will carry and request a copy of the carrier's cargo insurance policy. Classic car buyers once again can expect some resistance here. Reputable companies will have no problem with this request. There is a range of services available from these providers, from enclosed trailer with white glove service to open trailers that will get your vehicle dirty. Prices will vary greatly from one provider to the next, so a little time spent on research can save hundreds of dollars.
The first place to start your search is with the seller. More often than not the seller will know of companies in the area that provide this type of service. This could work in favor of the buyer especially if the service provider prefers to ship to their area because they can get vehicles for the trip back.
Don't forget to compare vehicle inspection reports that the driver will give you at delivery versus the condition reports you have accumulated during your research to indicate damage in transit. Note any inconsistencies on the bill of lading before signing it to insure you are protected should you need to file a damage claim.
RED FLAGS AND SCAM ALERT:
This section is prudent reading - but not because this article has to do with buying something on the internet. There have been people trying to trick others into giving them money since before the automobile was invented, never mind the internet. The internet has just created more opportunities. So rather than preach on this subject I will just list some red flag points that should make you run away from any seller stating the following:
Red Flag #1
If somebody you don't even know is trying to sell you a car worth $50K for $10K with a long story attached, Run. Yes, I know the story about the guy who left his girlfriend AND priceless classic car behind only for her to sell it for $10 out of spite. Do you really feel that lucky?
Red Flag #2
If the seller makes any references to Western Union or Money gram payments, Run. Nothing against these organizations, as they have their purpose, but not for compensating someone that is unknown to the sender of the money. And no, once the money has been sent, neither company can retrieve, trace or hold these funds. It is just like handing over a paper bag full of cash, only electronically.
Red Flag #3
The seller claims to have been cheated before and needs the process to go as he or she demands, basically putting all the risk onto the buyer. Chances are this person doesn't even own the car they have advertised for sale. Run. This list could continue for quite some time. Bottom line is, use common sense and trust your instincts.
Researching a vehicle online is certainly a tool every buyer should use to learn more about their next car. Whether it is just to check reviews or have the car delivered to your door, one thing is certain: The list of inventory you have to choose from will inevitably increase and it will be hard to resist browsing ads from all over the country. With the tools outlined in this article, you should have no problem finding the car of your dreams online.