Tips for buying a used car online

Buying a used car instead of a new one will probably save you money. However, finding, researching, and negotiating to buy a used car online can be difficult. Online sellers advertise they can make car purchases cheaper and easier, but some of them use tactics that could end up costing you time and money.

The Federal Trade Commission found that the online seller Vroom.com broke the law when it: failed to give people required buyers guides, misrepresented vehicle inspections, didn’t post copies of its warranties, and failed to give customers the option to cancel and get a refund when the company didn’t deliver many cars on time.

The law requires dealers to put a buyers guide on every used car, Jim Kreidler, consumer education specialist for the FTC, said in a statement. The buyers guide tells you if the car has a warranty or is being sold “as is.” In addition, for online sales, dealers need to give people the option to cancel their order and get a prompt refund when their car doesn’t ship on time.

If you’re shopping for a used car online, take these steps:

• Do research. Consider the kind of car you need, how you’ll use it, and your budget. Don’t forget other costs such as registration, insurance, gas, and maintenance. Research models, options, repair records, safety tests, and mileage. After you’ve decided on a car or cars, ask for the out-the-door prices in writing. Use the quotes to compare prices and avoid any add-ons.
• Get a vehicle history report. Start at vehiclehistory.gov to get free information about a vehicle’s title, the most recent odometer reading, and condition. For a fee, you’ll get other reports with additional information, such as accident and repair history.
• Consider payment options. If you select pay overtime rather than pay in full, consider how much you can pay as a down payment, the monthly payment, the financing period such as 60 months, and the annual percentage rate or APR. Online sellers and other places that offer financing – such as banks, credit unions, and finance companies – offer a variety of financing terms. Shop around, compare offers, and negotiate the best deal you can. Get prequalified for your loan.
• Negotiate the price. Online sellers are generally less likely to negotiate. However, it’s worth trying to see if there’s any flexibility on the price. You can also ask about any promotions or incentives that will help lower the out-the-door cost.
• Skip the ad-ons. You probably don’t need them, and you aren’t required to buy them. 
• Test drive the vehicle. For online vehicles, you need to review the delivery options and return policies. Since you usually can’t test drive these cars before purchasing, the seller may extend a short “test-own” window to ensure it’s a good fit. Read its guidelines carefully. You should drive the vehicle immediately after delivery. 
• Get help from an independent mechanic. You’ll have to pay the inspection fee to the mechanic, but it can help you avoid buying a car with major problems.

Be sure to consider the pros and cons of online car shopping versus the in-person experience before you buy a used car online. It’s a new business so be sure to learn how it works and read reviews.  

Comments

[Carol Cassara]

Very helpful stuff, Rita.

[Rita]

Thanks. I've heard of buying a car online, but I didn't know how it worked. It was good to find out that many companies give you a few days to test drive and vehicle and have it inspected before the deal is finalized. With some, however, you have to pay to have the car returned.

[Beth Havey]

Hi Rita,
My comment is about GETTING RID of a car. My daughter donated one to my son, her brother, but when we moved back to Chicago, we bought a new car and gave him our old one. The first car-gift sat on
his driveway for years, until he finally called one of those places who are glad to haul you old car away.

So that's my car story...we have already gone through your advice covering how to buy a new one. Thanks.

[Rita]

It's good that you've studied how to buy a new car. It's a complicated process.

Rita