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Here’s How to Get a Great Deal on a New Car

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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In the market for a new car? Don’t worry, scoring a great deal on a new car doesn’t have to be overwhelming. There are numerous ways to get a great price if you know how to ask for the deals and know where to look for them.

If you haven’t done a ton of research, it’s a little nerve-wracking to visit dealerships and negotiate prices in addition to discussing policies for warranties and insurance.

But it doesn’t have to be that way. There are a number of tactics and resources to help navigate the somewhat pressure-filled undertaking of buying a new car.

There are a lot of moving parts to figure out if you are getting a good deal on a car. You have to consider things like the upfront costs, long-term expenses, and rates. Fortunately, doing your homework beforehand can help you snag the best deal.

Eight ways to get the best deal on a new car

1. Understand the total price you’ll pay

Most of us just think about the monthly payments, and how it will fit into our budget. That’s a major mistake for two reasons:

  1. It can make the loan term longer and/or boost the interest rate.
  2. It makes it harder for you to understand exactly what you’re paying for when you’re just going by a monthly fee.

You’ll want to get a monetary breakdown of everything you’re paying for before you sign on the dotted line. Ensuring that you receive the out-the-door price that includes tags, taxes, fees and any other extras will go a long way in helping you understand exactly how much your new car is costing you.

You’ll want to be certain you know the invoice price of the car, not just the manufacturer’s suggested retail price (MSRP). The invoice cost is what the dealership paid the auto manufacturer for the car. This will become key in your price negotiations down the line since you’ll want to negotiate the price of the car down to as close to this number as possible to get the best deal.

2. Know your trade-in value

Knowledge is power. If you are interested in trading in your old car (as opposed to donating it or reselling it), you’ll need to find out how much its worth. Fortunately, the National Automobile Dealers Association has a helpful guide for assessing the value of your old vehicle. Find out exactly the current selling price before you trade your car in at the dealership so you can know whether the dealership you are haggling with is giving you a fair market price for it. You could also read more about the people you might meet at the dealership.

3. Get preapproved

Getting preapproved helps you get a better deal because you know just how much you can afford, and it can help you score a better deal when it comes down to the negotiating table since you won’t necessarily need dealer financing. Getting preapproved means that you get a conditional approval for a loan at a set interest rate, period and for a set amount of money. Obtaining preapproval for a loan has definite pros, including:

  • It’s simple and quick. You could also compare custom offers from multiple lenders in just minutes.
  • It will save you time at the dealership. When you do some of the virtual paperwork at home, you will probably spend less time with the sales and finance representatives.
  • By getting preapproved, you are doing your due diligence by taking control of financing experience of purchasing a car. This shows you are serious about getting the best deal, and you’re taking the necessary first steps toward financing your new car. Also, when you arrive at the dealership, you’ll have a pretty solid idea of the interest rates and terms you can expect for the car you’re buying.

Just as there are positive points to getting preapproved, there are some drawbacks as well. Ronald Montoya, senior consumer advice editor for Edmunds, said there aren’t too many negatives to being preapproved, but consumers should be aware of the following:

  • Don’t “sit” on your loan application. Banks can choose to do a hard inquiry or soft inquiry on your credit every time you apply for preapproval. According to Montoya, if you do all the preapprovals within two weeks, the banks know you are shopping for a car, so they won’t ding you every single time you apply for a loan. If you wait for a while, it’s considered a separate occasion and that may reflect badly on your credit. Check with each bank before getting preapproved to see how they pull your credit.
  • Be mindful of how much money you’re borrowing. Montoya said it varies by bank, and some banks will approve a specific amount and that gives you the flexibility to change your mind on certain models as long as it’s within that price range. Other banks will want to know exactly which model you’re interested in, and give you a loan for that exact amount, so you’ll need to check with that bank before getting the preapproval.

As a rule, Montoya said it’s a good idea to know what you can afford. If you realize that you didn’t get preapproved for the amount, there may be an issue with your credit that needs to be addressed.

4. Shop around

You need to know what kind of deals are out there and compare as many offers as you can. You may also want to check out dealerships and showrooms outside your local market. Sure, you may spend more time and a little more gas getting to some out-of-the-way places, but it’s worth it to compare offers.

Gathering multiple price quotes can also help you lower the price. By presenting a dealership with competing offers from other dealerships, you may get the sales folks to engage in a kind of bidding war. In doing so, you may walk away with the lowest price by obtaining more than one offer from other showrooms in the area.

5. Flex your negotiation skills

Montoya said it’s always a good idea to negotiate because the first price you get is not necessarily the best price you can get. He suggested that people do away with any outdated notions about negotiating as being a kind of haggling – going back and forth on price. He suggests getting a number of different prices from different dealerships on a vehicle so you have a number of options: if you don’t want to negotiate, you can just take the lowest one. Or, if you like one that costs a bit more, but you are a fan of the service at that particular dealership, you can ask the salesperson if they can beat the price you received earlier. You can let the staff know you want to do business with them because of their location, or because they had the vehicle in a color you really want.

“This way,” Montoya explained, “you have a reason for why you’re negotiating. Even if you’ve just checked the price online and seen what the market value is. That’s something you can point at, as opposed to just saying, ‘Can you knock off $3,000 off this car?'”

Knowing that there are multiple prices floating around makes your case much stronger and can snag you a better deal.

Here are a few tips for being a pro negotiator:

  • Don’t get emotional

Remember negotiation is about business, not feelings. Don’t get swayed by emotions when you’re negotiating the car of your dreams. You should always be ready to pursue another dealership at the drop of a hat in order to get the best deal.

  • Do the math

If you’re asked, “How much can you afford to pay per month?” be extra careful.
That’s the advice of Sonia Steinway, president of Outside Financial, LLC. “That’s usually one of the first questions dealers ask prospective car buyers, and it should be a red flag,” she said. “The dealer knows that few car buyers like to do the math. As long as the dealership can extend the loan length to adjust the monthly payment, the customer doesn’t think about the total purchase price. The borrower pays more in the long-term, but doesn’t feel the pain each month,” Steinway said.

  • Think twice about bundled features

Before you set out on your car-finding mission, Montoya advises buyers to make a quick list of must-have options. Then, figure out which trim levels and options are going to include what you want. “If, for example, you want navigation, and it’s bundled in a technology package that costs like $2500, then you have to really debate how much you need that navigation,” he explained.

Montoya suggests that you take your must-have list with you as a reference point while you shop. “It’s important to know the basic features that you want to have,” he said.

  • Don’t shop while drowsy

Car dealers know that most consumers hit the cognitive overload point after a long day of perusing the showrooms. Sonia Steinway said that’s one of the reasons they wait to present financing options until after you’ve already spent a few hours test driving and haggling over price.

“You’re tired, hungry, and overwhelmed, and that’s when psychological research suggests you are the most vulnerable to being taken advantage of,” she said. Just like you shouldn’t go to the grocery store when you’re hungry, never shop for a car when you are feeling exhausted.

6. Have a Plan B

You may have tunnel vision when it comes to your dream car, but there are comparable models that may net you significant savings. You owe it to yourself to consider those vehicles and see if one might suit you better than the car you had your heart set on. Be sure to check out the comparison tools provided by NADA and J.D. Power for help comparing different makes and models.

7. Rebate? Great!

Automakers and dealers continually offer rebates and incentives. It’s always a good idea to ask about current specials, sales events and inventory blowouts. You could walk away with a great car, and a great deal.

8. Warranties, insurance and other things to consider

Extended warranties are another thing to consider. Montoya said there is really no simple answer to whether buyers should opt for an extended warranty. It’s very much a personal choice.

“Some people do want that piece of mind that an extended warranty gives them,” he said. “Others,” he continued, “question the price of it.” He advises asking questions about warranties and other extras before you sit down in the dealership’s sales office, where it becomes a pressure-filled push to seal the deal that day. Call ahead to ask about the warranty. You have no obligation to buy the warranty, nor are you obligated to buy it at the time of sale.

“In fact, you have until the manufacturer’s original factory warranty expires, so that gives you some time to kind of spend some time in the car, see if it gives you any issues, and see if you want to move forward with that warranty,” he said.

Montoya also advises folks to consider insurance “very early on” once you’ve decided on a couple of vehicles. He said it can help you decide between two cars if one make/model has a higher insurance cost than the other. This particularly comes into play if vehicles have advanced safety features that include sensors like adaptive cruise control and blind spot monitoring. Those features add up to higher insurance costs because they are expensive to replace in the event of an accident.

The bottom line

Taking the new car plunge isn’t easy. Before moving forward on a purchase, you’ll need to do quite a bit of analysis and be extremely patient. Fortunately, today’s auto dealers know that buyers have extensive information at their fingertips and will work with them to make a deal. It’s important to do your homework, ask the right questions, be realistic about what you can afford and keep your emotions in check. By taking these steps, you can snag the keys to the car of your dreams, knowing you got a great deal.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Auto Loan, Reviews

LightStream Auto Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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If you’re in the market for a quick, affordable and hassle-free way to finance your next car, a LightStream auto loan should definitely be on your radar. It’s particularly well-suited for deal-seekers with good credit who don’t mind working with an online company when it comes to financing their cars. If you’d rather work with a local company that can offer in-person support, however, you might want to skip this lender.

How LightStream auto loans work

LightStream offers a wide range of options for financing your next ride, including:

  • Purchase of a new or used car, either from a dealer or an individual
  • Auto loan refinance (except it does not refinance its own loans)
  • Auto lease buyouts
  • Loans for motorcycles, as well as boats and RVs
  • Classic car loans

Auto loans at a glance:

  • Starting APR range: 3.49%–9.49%
  • Fees: None
  • Loan amounts: $5,000–$100,000
  • Terms: 24–84 months
  • Credit requirements: Minimum 660 credit score
  • Mileage or vehicle restrictions: None

LightStream offers the same starting rate whether you’re buying a new or used car from a dealer, something you don’t see at other lenders. But keep in mind that the lowest rates go to those with the best credit who opt for the shortest loan terms possible and use autopay to make their car payments.

Satisfaction guarantee

If you see a lower rate elsewhere, LightStream will beat any verified offer with a rate that is .10 percentage points lower. It also promises a $100 guarantee within 30 days if you aren’t satisfied with your loan experience.

How to apply for a LightStream auto loan

The only way you can apply for a LightStream auto loan is through its online form. It is an online lender, after all, so you should be comfortable with handling your business details — including the loan application — online. You’ll need to:

  1. Acknowledge receipt of LightStream’s statement on the use of electronic records.
  2. Agree to receive electronic records.
  3. Agree to use electronic signatures to sign your loan documents.

You’ll also need to have a Visa or Mastercard credit card to apply, which LightStream uses during the verification process.

You will be asked to provide:

  • The purpose, term and amount of desired loan
  • Your name
  • Your address
  • Phone number
  • Social Security number
  • Employment information
  • Annual income
  • Total amount of assets and equity in your home

From there, LightStream may contact you for more details and documentation. If approved, you’ll need to sign your loan documents electronically and provide LightStream with your bank account details. The money will then be deposited into your bank account, which means you’ll need to pass it along to the seller, whether that’s a dealer or private seller. LightStream will not send the money to the seller directly.

It’s important to note that LightStream doesn’t offer any preapproval options, but if you apply and are approved for a loan, you are under no obligation to accept the loan.

How to qualify for the best rates

LightStream requires good credit at a minimum, but looks for excellent credit when giving the best rates. It defines excellent credit as:

  • Five or more years of significant credit history.
  • A credit history with a variety of account types such as major credit cards (for example, Visa, MasterCard, Amex), installment debt (vehicle loans) and mortgage debt if applicable.
  • An excellent payment history with no delinquencies or other problems repaying debt obligations.
  • A proven ability to save as shown by some or all of the following: liquid assets (stocks, bonds, bank deposits, etc.), cash down payments on real estate, retirement savings and little, if any, revolving credit card debt.
  • Stable and sufficient income and assets to easily repay current debt obligations and any new loan with LightStream.

Pros and cons of LightStream auto loans

LightStream offers the convenience of an online lender with the backing of a brick-and-mortar bank as the online arm of Truist, the bank created by the merger of  SunTrust Bank and BB&T. But it’s important to weigh all of your options carefully when choosing an auto loan. It’s one of the biggest purchases you’ll make, after all.

Pros

  • Wide variety of loans: New, used, refinance and lease buyouts loans are available on a wide range of vehicles. Unlike other lenders, LightStream doesn’t place restrictions on your vehicle’s age, make, model or mileage.
  • Decent rates: We’ve seen lower starting rates at credit unions, but you’ll have to meet membership requirements. LightStream has no membership requirements and provides the same starting rates for new and used vehicles as well as refinance loans.
  • No down payment required: LightStream finances up to 100% of the car’s cost. Of course, it’s always best to put down as much as you can afford on an auto loan. This will help you save money over the life of your loan and avoid becoming underwater on that loan.
  • Quick funding: If you complete the application process and are approved by 2:30 p.m. EST, you could receive funds the same day.
  • Good reviews: LightStream auto loan reviews are generally positive.

Cons

  • Good credit required: To qualify for a LightStream auto loan you’ll need a credit score of at least 660 or better.
  • No preapproval process: Unlike many lenders, you’ll have to complete a full application in order to see your rates and terms. Still, the process is fast, and if you complete your rate shopping within a certain time period, multiple applications should not impact your credit any more than a single application.
  • No face-to-face service: If you’re the type of person who likes to seal the deal with a handshake after signing the documents, you’ll want to stick with some place local.

LightStream vs. Capital One

If you’d like a bit more of a guided approach to the car-buying process,  Capital One’s Auto Navigator loan options might be better for you. Rather than sending you cash directly that you can use on whatever car you want to buy, Capital One’s Auto Navigator service lets you first get prequalified for financing, and then shows you which dealers in your area may offer based on the type of car you want to buy and the financing you can afford.

If any of the offerings pique your interest, you can then finish the application and buy the car. It’s still a good idea to compare the offer with other new and used car loan rates.

LightStream vs. Carvana

Carvana works similarly to Capital One Auto Navigator in that you can prequalify for financing and browse real cars in your area that you may then be able to buy. It’s important to remember that Carvana only sells used cars and its financing is only available on Carvana cars. But it is possible to finance here with poor credit — Carvana requires borrowers to be 18 years old, have no active bankruptcies on their credit report and earn at least $4,000 per year.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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How to Buy a Car Online — from Start to Finish

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Visiting a car dealership lot can sometimes feel like walking on a knife-edge. Salespeople could pressure you into spur-of-the-moment decisions that could leave you buried up to your eyeballs in debt for the next several years.

Buying a car online can be a much smoother and well-informed experience compared with traditional car buying, but it does require a bit more legwork on your part. Before you dive in, you’ll want to make sure you’re well-informed on how to buy a car online.

Part I: Traditional vs. online car buying

Curious about buying a car online but unsure of how the experience compares to traditional car buying? The processes are similar in a lot of ways, but skipping the dealership can actually give you a leg up as a buyer.

The troubles of traditional car buying

Before the internet revolutionized everything, there really was only one way most people bought a car: They’d visit car lots, find a car they liked and then sit down with a car salesman to work out an agreement. This led to the dreaded negotiation process.

“There’s all this back-and-forth and, ‘Oh, I’ve got to go talk to my manager,’” said Jack Gillis, executive director of the Consumer Federation of America and author of “The Car Book.” “Well, the guy goes back and has a cup of coffee and lets you sit there and steam for a while, then he comes back and gives you some song and dance about why they can or can’t do something.”

Because most people treated car dealerships as one-stop shops for buying a car, they often wouldn’t be informed about the full range of cars, financing options or trade-in choices available to them. Without these bargaining chips, consumers are at the mercy of the car salesmen.

How buying a car online empowers the buyer

With online car buying, it’s possible to complete every phase of the car-buying experience — from finding the right car to negotiating — entirely online.

Perhaps the biggest benefit of buying a car online is that it puts you in greater control of the car-buying process and no longer at the mercy of the salesmen at one dealership. You can expand your options for cars, financing and trade-ins, and then use your findings to negotiate for your best price possible.

“The whole digital part really is empowering for the buyer because there’s so much information that you can use to make an informed decision,” said Matt DeLorenzo, managing editor of KelleyBlueBook.com.

The downside of all this power is that it requires a bit more legwork on your part to bring all the pieces together. On the bright side, doing your homework can save you thousands of dollars and ensure you get the best car possible.

Part II: 7 steps to buying cars online

Step 1. Choose the right car

It’s important to choose a type of car that will best fit your needs. Do you want a fuel-efficient vehicle for short commutes? Do you need to haul around large amounts of cargo? Do you have a large family or a small one? Thinking about questions like these can help you zero in on what kind of body style (truck? SUV? compact car?) will suit your needs.

Once you narrow down a body style, it’s time to research what specific makes and models of cars might be best for you. Good research websites include Edmunds, Car and Driver and Kelley Blue Book.

If you’re buying a new car, you might be offered certain options and add-ons from the dealer, such as VIN window etching or rust-proofing. Before you go signing up for every option offered (and sign away your whole paycheck in the process), it’s important to research these options. You can face big markups and can easily get these add-ons yourself if you decide you need them down the road.

Step 2. Determine the price you want to pay

Next up is determining how much car you can actually afford. The more conservative rule of thumb is the 20/4/10 rule, but if that’s not possible for your budget, make a concerted effort to try to meet the 10/5/20 rule. Here’s how the two rules break down:

Rules of Thumb for Transportation Costs
20/4/10 Rule10/5/20 Rule
Minimum down paymentMake a minimum 20% down paymentMake a minimum 10% down payment
Loan termFinance for no more than four yearsFinance for no more than five years
Monthly transportation expenses, including insurance, gas, etc.Total expenses shouldn’t exceed 10% of your monthly incomeTotal expenses shouldn’t exceed 20% of your monthly income

These rules could help you set a cap on your car-shopping budget. For example, if you have $3,000 saved, it might be a good idea to avoid buying a car for more than $15,000 ($15,000 x 0.20 down = $3,000). From there, you can assess any financing offers to make sure that you’re not spending more than 10% of your income on the car and that your financing doesn’t stretch beyond the four-year mark.

You can narrow your car search down even further using these budget caps. If a car’s MSRP is far outside of your budget, weed it out of consideration. You can use websites like Kelley Blue Book or the National Automobile Dealers Association to research the current prices for new and used cars in your area.

Step 3. Get approved for financing online

It’s important to get preapproved for an auto loan before you actually go shopping. Getting preapproved for a loan does not mean you have to take the financing; rather, it helps you stay within your budget and gives you a bargaining chip in negotiations.

You can easily get preapproved for an auto loan online through websites like LendingTree, which is the parent company of MagnifyMoney. Using our auto loan marketplace, you can fill out one online form and potentially get offers from several auto lenders at once, depending on your creditworthiness. It’s also a good idea to check around with local banks and credit unions, which may offer deals locally.

You’ll generally need a high credit score to qualify for the best auto financing offers. If you don’t have a high credit score, you will likely be preapproved for a loan, but it may come with higher interest rates. If you’re outright denied for a preapproved loan, you may need to consider shopping elsewhere or waiting a little while so you can take steps to increase your credit score.

If you are qualified for preapproval, the lender will give you a preapproval letter. Make sure to keep a copy of this letter, and bring it with you when it comes time to negotiate a price on the car you’ve chosen.

Step 4. Choose the right source

Once you get to this point in the process, it’s time to cast your net and see what cars are out there.

One place to look is AutoTempest, a comprehensive website that searches several websites, including Craigslist, for specific makes and models. If you’re looking for one particular brand, don’t overlook your local dealership’s website. Other possible websites to go to scope out cars include:

We also made a list of the best online car-buying sites that you can check out to help you in your search.

With the power of the internet, the whole world (or at least the whole country) can be your virtual car lot. If you’re able to travel to pick up your new vehicle, you might be able to save a trunkful of cash by broadening your search.

For example, if you live in a snowy climate and are looking for an all-wheel drive car, you might try looking in a warmer area. “There might be better incentives on all-wheel drive cars in, say, Arizona than in the Northeast where they got a lot of snow,” said DeLorenzo.

Step 5. Get quotes

Once you’ve identified your targets, the next step is to find out how much they’ll cost. You’ll negotiate your final price in the next step, but this step sets a starting point.

Contact the dealership directly and ask for a quote for each vehicle you’re interested in. It’s important to do this as the price may have changed or the vehicle may have been sold. But perhaps the main reason this is crucial to do is so dealers will be motivated to give you a better price than what’s online, and it puts the starting line for negotiations much closer to the finish line.

Email or call the dealership and ask for their internet sales manager, as this is the person you’ll work with through the negotiation process. Give them the VIN or stock number of the vehicle you’re interested in and ask for a quote. Then, ask them to email it to you so you have it in writing.

It sometimes can be difficult to get a dealership to quote a price, but it’s important to insist that dealers give a price estimate for the make, model and year. If quote collecting isn’t your thing, you also can hire a service to do this for you, such as CarBargains. For $250 and a detailed description of what you’re looking for, CarBargains will collect at least five different dealership quotes for you.

Collecting these quotes gives you the bargaining power you need to negotiate prices down as low as possible in the next step.

Step 6. Time to negotiate

Ah, the dreaded negotiation. Since you’ve already gone through all of the steps to be an informed consumer, negotiating your price will be a much smoother process. Specifically, you’ll be negotiating the price of three separate items: vehicle price, financing cost and trade-in value.

Vehicle price

This is the most important piece. You can — and should — present the offers you’ve received in the prior step. Did someone offer $12,500? Show that emailed quote to another dealer and ask if they can lower their price to $12,000. Car dealerships are usually very easy to negotiate with online.

“If you think about it from an efficiency point of view, an online salesperson can be working more deals at one time than somebody on the floor who’s physically with one person,” said DeLorenzo. “Sometimes it’s actually more cost-effective for the dealer to sell it through or do a lot of the negotiation online.”

Car salespeople will often try to upsell you on add-ons when negotiating the price for a car. “They may say, ‘Well this will only cost you 10 bucks more a month.’ Well, yeah, and that’s $120 over a year. Over five years that’s $600, $700. You can’t let bells and whistles cloud your judgment,” said DeLorenzo.

Stick to the basic total numbers, not the monthly payment, and don’t let yourself get distracted.

Trade-in price

Chances are that you already have a car that you want to trade in to help defray your costs. Most dealerships will accept trade-ins, but be warned: You will probably get much less than if you shop around for trade-in prices on your own.

Websites like Kelley Blue Book allow you to find a fair trade-in price for your vehicle. In addition, you can use a tool on Kelley Blue Book’s website called “Instant Cash Offer” to get bids from dealers on your car.

“The beauty of having something like that is that it sets a floor for what your car is worth,” said DeLorenzo. “You’ll know you’ll get at least that much in trade or in an outright purchase, and that’s important leverage to have when you’re negotiating a new car deal.”

Additionally, you can try selling your car yourself through sites like Craigslist. Generally, going this route will net you your best price for your old car, although this may take more time and energy than simply driving onto a car lot with your old car and driving off with a new one. Here’s more on what to know before you trade in your car.

Financing cost

The final piece of the puzzle is how you’re going to pay for your new car. Since you’ve already taken the time to be preapproved for an auto loan, this step should be simple.

Show the dealer your preapproval letter and ask them if they can beat it. If so, great. If not, then you know you’ve already secured the best auto financing deal possible.

Step 7. Making the final purchase online

Once you’ve lined up the three pieces of the puzzle — the lowest car price, the lowest financing price and the highest trade-in value — it’s time to make your decision. Most dealerships still require you to physically come in to complete the final paperwork signing. However, that’s beginning to change.

“Savvy dealers are beginning to digitize as much of that kind of paperwork [as possible], to just make it easier to buy a car from them,” said DeLorenzo. “It works out better for them, too. I mean, if they’re able to get you in and out quicker, they can sell more cars quicker.”

But as far as completing the entire purchase process online? “I think there are dealers who are willing to do that,” DeLorenzo said. “The question is, do you want to do that?”

For now, you’ll likely still need to do some of the physical aspects of buying a car, such as taking it for a test-drive, in person. Perhaps someone will invent a virtual test-drive machine in the future!

Part III: Staying safe while shopping for cars online

Luckily, outright scams aren’t too common when it comes to buying cars online, according to Gillis. Many car dealers are subject to consumer-friendly regulation by the Federal Trade Commission. Still, there are some things to be aware of when shopping for cars online.

Beware the bait-and-switch

One situation that Gillis has seen involves a bait-and-switch technique when consumers arrive at the dealership to complete the purchase after negotiating everything online.

“You’ve got it all squared away. You get to the dealership to close the deal, and all of a sudden, ‘Oh my gosh. I can’t believe it, someone just came in and bought that car, but we have another one here that actually has a few better features on it, and it’s just the color you wanted, and it’s only gonna cost you $20 more per month,’” Gillis said.

If this happens to you, be prepared to walk away from the dealership as they’re likely just trying to weasel more money out of you.

Get an inspection from an independent mechanic

If you’re buying a used car, whether at a dealership or from someone you found on Craigslist, you should absolutely get an inspection first. Everyone has heard horror stories about buying a lemon (or worse, being the person who bought the faulty car). The seller will surely tell you that the car is in perfect shape, but how do you really know? Getting an auto inspection by an independent mechanic is perhaps one of the best ways to protect yourself.

If you’re unable to take the car to your own mechanic, DeLorenzo recommends a service from AiM Certify. For as little as $129, you can book an independent mechanic anywhere in the country to travel to the dealership and perform an inspection for you. You’ll get back a full mechanical report complete with actual photos of the car.

Try before you buy

If you’re not happy with your choice, you may have wasted tens of thousands of dollars. That’s why it’s crucial to take a test drive before you commit.

“Most of the problems that consumers end up not liking about their vehicles could have been determined in a test-drive,” said Gillis. “For example, it’s hard to park, or the back seat really isn’t that comfortable, or the trunk really doesn’t hold that much, or when changing lanes, there’s a big blind spot in the back.”

Jenn Jones contributed to this article.

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