Philip Reed
Philip Reed, who writes a syndicated column about cars for NerdWallet.com that has appeared in newspapers including USA Today and The Washington Post.
Buying a new car from home not only helps you avoid crowds and aggressive salespeople—it also can save you lots of time and hundreds or even thousands of dollars. Here’s what you need to know to help you succeed…
Why It Works
The in-person car-buying process is grueling on purpose—dealerships know that the more time a buyer spends discussing a purchase, the greater the odds that he/she eventually will make that purchase, even if the price isn’t great. It’s psychologically difficult for would-be buyers to walk away empty-handed, especially when face-to-face with a salesperson. That would mean admitting those hours were wasted…and dealing with the fact that the process will have to be launched all over again at a different dealership.
In contrast, dealerships tend to offer significantly better deals to buyers who contact them online—without prolonged negotiations or dealership tricks—rather than shop in person. They have learned that at-home shoppers tend to be savvy consumers who solicit quotes from multiple dealers and won’t overpay. Online shopping also forces dealers to compete with other dealers because shoppers can contact many dealers in the time it takes to visit one dealership in person.
Not every dealership is anxious to sell cars this way, and certain aspects of the buying process remain tricky to handle from home. But in this difficult economic and health environment, dealerships are more likely than ever to work with buyers who decline to drop by.
9 Key Strategies
1. Test drive cars from home. Call the closest dealerships that sell makes and models that interest you, and ask whether the cars can be brought to you for test drives. If you are concerned about visiting a showroom for health-safety reasons, explain that you intend to buy a car soon but you don’t want to visit the dealership. Many dealerships began offering no-cost, no-commitment drop-off test drives to local shoppers this year, and some were willing to do this even before this year. You might want to confirm that the employees who bring the cars wear masks and wipe down the cars with disinfectant—or you might want to do so yourself.
Alternatively, you could test drive at the dealership but then quickly leave to maintain your negotiating edge—do not let yourself get roped into negotiating the price of the car while you’re on the dealership lot.
2. Request quotes from dealers through car-shopping websites. Sites including CarsDirect.com, Edmunds.com, Kelley Blue Book (KBB.com), RydeShopper.com and TrueCar.com allow you to request online quotes from multiple dealerships in your area. Edmunds, Kelley Blue Book and TrueCar also have tools that show shoppers how much other buyers in their area have paid, on average, for the same vehicle. Try several sites—different dealers may use different ones. You typically will have to provide contact info including an e-mail address and phone number, so you might receive sales calls and/or e-mails, at least until you have bought a vehicle.
There’s nothing unethical about test driving with one dealership and buying from another—and if this does bother you, you can always give the test-drive dealership business by bringing your car there for servicing.
Some dealerships might suggest that you stop by to discuss the purchase rather than provide a quote. Respond that you are interested in receiving quotes only via e-mail or phone.
3. Call area dealerships that sell the type of car you want but that did not provide online quotes through the websites above. Not every dealership works through the third-party websites, but virtually every dealership has an “Internet Department” these days that handles customers who make contact through the website. When calling, ask for this department or the “Internet Sales Manager”—or e-mail this person—and then request a quote on the car and option packages you want. The Internet specialists are more likely to offer a fair price right off the bat with relatively little sales pressure—their mandate tends to be to sell cars in high volume, not necessarily with the highest possible profit margins.
Gather quotes from at least five dealerships, either directly or through the third-party websites. Using price-comparison tools on the third-party sites, confirm that the lowest of the quotes is less than what the average buyer paid—or whatever price you consider appropriate based on your research.
In rural areas (or with uncommon makes or models), you might have to include relatively distant dealerships to obtain five or more quotes. Reminder: You don’t have to bring a car back to the dealership where you purchased it when it needs warranty or recall work. Any of the make’s dealerships can do these repairs.
4. Call your bank or credit union to prequalify for a car loan if you intend to finance the car. Many automakers have been offering extremely attractive financing deals these days—in some cases, 0% interest. But the best of these deals often are not available to buyers who have less-than-excellent credit. If your credit score is below the mid-to-high 700s, call bank/credit unions and ask to be prequalified for an auto loan. If the dealership later says that you don’t qualify for an attractive financing deal, use this bank/credit union loan offer instead.
5. Obtain quotes on your trade-in from online car-buying companies. Dealerships often make low-ball quotes on trade-ins because they know many car buyers don’t want to deal with the hassles of selling their used car on their own. That’s especially true given this year’s health concerns—selling a used car can mean interacting with multiple strangers.
Instead, obtain offers on your current car from CarMax.com, Carvana.com, Shift.com and/or Vroom.com. These used-car dealers often offer more than a new-car dealership would for a trade-in—though likely less than you could get if you sold your car on your own. Some even will pick up your vehicle from your home. If nothing else, having a quote in hand from one of these companies could help you negotiate a better price on a trade-in with a dealership.
6. Check for automaker incentives and rebates on the vehicle you intend to buy. Look for these on the automaker’s website and on Edmunds’ Car Deals and Incentives page (Edmunds.com/car-incentives). Note any that seem to apply to you.
7. Pin down the best price. Reach out to the dealership that quoted you the lowest price, and ask it to confirm that this is your “out-the-door” price, including all fees, taxes and registrations. Ask the dealer to e-mail you a breakdown of the quote, detailing all fees, taxes and other costs, if it hasn’t done so already. If you found any incentives or rebates for the vehicle, ask if these are included in the quoted price and, if not, whether they can be applied to the quote.
If you want to try to negotiate, contact dealerships that did not offer the lowest quote and give them a chance to beat the lowest quote…and/or make a counteroffer to the dealership with the best price. But don’t expect to lower your price very much—if you’ve obtained five or more quotes online, the best of them is likely within $200 to $500 of the lowest feasible price.
8. If you’re financing the purchase, run the numbers through a car-payment calculator. Occasionally, dealerships agree to a price and interest rate but then use a higher price or rate when calculating the buyer’s monthly payments. They know that most buyers won’t spot the discrepancy. You can easily check for this trick if you’re buying a car from home—enter the agreed-upon price, interest rate, loan length, down payment and trade-in value, if applicable, into NerdWallet’s Car Payment Calculator. If the monthly payment displayed doesn’t match the one quoted by the dealership, ask the dealership to explain the discrepancy—and work with a different dealership if you’re not satisfied with the explanation.
9. Ask the dealership if it can deliver the car to you along with the paperwork that needs to be signed. Some, though not all, dealerships will agree to do this if that’s what is needed to close the sale. Depending on state law, it even might be possible to sign the necessary paperwork online.
If delivery is not possible, ask whether the paperwork can at least be handled with as little in-person contact as possible.
