Should You Buy Your Next Car Online Or At A Dealership?

Should You Buy Your Next Car Online Or At A Dealership?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated November 25, 2022

You most likely shop online for a variety of consumer products, like clothes, household products, and even groceries, so why not shop online for a new car?

There are many online portals available for you to browse and shop for a vehicle. Though buying a car this way might be something you want to get more familiar with, considering the magnitude of such a purchase. Let’s get into more detail about buying a car online versus through a dealership to help you decide which shopping experience is better suited for you.

Buy A Car Online vs. At A Dealership 

Obviously, shopping online for a car means you won’t see the vehicle in person before you buy it, but it also means you benefit from the convenience of shopping from home. On the other hand, shopping for a car at a dealership means you’ll be able to see the vehicle up close, though you’ll have to make the trek to the car lot to shop. Below are some of the other main differences between buying a car online versus at a dealership that all car buyers should consider. 

Buying A Car Online 

Buying your car via the internet is not unlike other types of online shopping. You can peruse websites to look for vehicles that match your criteria, compare prices and features, and make a shortlist of cars that you might want to see in person before you leave the house.

Find The Right Site

Start off by looking at different websites and filtering your searches so that only the cars that meet your requirements come up in your search results. We’ve listed some of the most popular sites that sell cars in Canada below, so check them out. 

Compare Prices 

It’s important to compare prices for vehicles with the same or similar make, model and features across different sites. This way you’ll be armed with the best information, whether or decided to purchase a car online or end up heading to a dealership.

You’ll also come across far more options and choices when you shop online versus shopping with just one dealership. 

Consider The Total Cost Of Owning A Car

You’ll also want to do some research on other costs related to owning a car, such as insurance, registration, the type of gas that the car would need, and so forth. 

Buying A Car At A Dealership 

If you prefer to shop in person — for a car or any other consumer product — then perhaps shopping with a dealership may be the best option for you. Doing so will allow you to see the cars upfront while speaking with a salesperson face-to-face to have all your questions answered on the spot.

Visit Multiple Dealerships

You may need to make more than one trip to the dealer, and you may also find yourself hopping from one dealer to the next in order to find the best car at the best price. 

Find A Great Sales Associate

Finding a good sales associate who you can communicate well with and who understands your needs, is a pretty important part of buying a car from a dealership. This is also why it’s in your best interest to visit more than one dealer. 

Know Your Prices

No matter where you plan to buy your car, get familiar with what the going prices are for the specific type of vehicle you’re looking for. That way you can be armed with information and be in a better position to negotiate. 

Take The Opportunity To Test Drive

When you buy a car online you may not get the chance to test drive any vehicles. So if you’re heading to a dealership, don’t miss out on your chance to take a few cars out for a test drive before honing in on the car that’s best for you. 

Pros And Cons Of Buying A Car Online 

There are a few perks and drawbacks to buying a car online that you should consider before choosing which route to take.

Pros

  • Less pressure. Since you’re not speaking directly with a salesperson, you won’t have to deal with any aggressive sales pitches to get you to buy the first car you see. Instead, you can shop around for vehicles and compare prices and specs at your leisure without any pressure from anyone while doing so.
  • Convenient. You don’t have to leave your home to shop for a new car, which can help save you a lot of time and hassle. Rather than physically taking yourself from dealership to dealership, you can do all that “legwork” from your computer and only make the trip to a car lot when you’ve zeroed in on a car you’re interested in. 
  • Research and compare prices. Comparison shopping has never been easier thanks to the internet. And there are some websites that allow you to plug in the features and price range of the car you want, which will then populate a list of vehicles that match your criteria for easy comparisons. 

Cons

  • Can’t test drive the car. Buying a car without taking it out for a test drive is a bit risky. If you want to take the car out for a spin, you’ll need to physically make it out to a car dealership. 
  • It may be hard to reach the seller. You may find it difficult to get a hold of the seller, in which case a bit of back-and-forth messaging may be involved, which can make the process cumbersome. 
  • Hard to understand the car’s condition. Without seeing the vehicle in person before committing to buying it, you may be putting yourself in a riskier position to purchase a vehicle that may have certain faults you may not be comfortable with. 

Pros And Cons Of Buying A Car At A Dealership

Like buying a car online, you’ll also want to take some time to understand the pros and cons of purchasing a vehicle at a dealership.

Pros

  • Negotiate with the dealer. There may be limited opportunities to wheel and deal online when buying a car remotely. On the other hand, you may have a better chance to negotiate when dealing with a sales associate in person.
  • Add features. Car dealers may offer many extra features as incentives that you can take advantage of right away, which is not likely the case when shopping.
  • Get financing. If you need some help covering the cost of your vehicle purchase, dealers typically offer many financing options that you can apply for if you buy a car in person.

Cons

  • Sales tactics. Buying in person will mean you may be subject to a pushy salesperson who is working hard to earn their commission on the sale of a vehicle.
  • Pressure to make a decision. If you’re unable to deal with sales tactics very well, you could find yourself buying into something that you ultimately don’t want. 
  • Can be more expensive. You may find that buying online is cheaper, as there are many deals to be had among various sellers. At a dealership, they may throw in some unnecessary extras that may be cheaper elsewhere.

Where Can You Buy A Car Online? 

There are several places to look online if you prefer to buy your next car remotely:

Canada Drives

Canada Drives 

Search thousands of certified cars online and complete your purchase from wherever you are. The entire process, including payment and the signing of any contracts or agreements, can be completed online. Your purchase will also come with a 30-day warranty, a 7-day money-back return policy and same-day delivery in select provinces. 

Moreover, unlike other online car buying platforms, Canada Drives offers online car financing through its partners. One of the most unique features that make Canada Drives stand out is that they allow clients to qualify for financing prior to choosing a car. Doing so, allows them to offer their clients a selection of cars they are pre-approved for, thereby avoiding any heartache caused by an inability to qualify for financing. 

Canada Drive Main Features
  • Car delivered to your door
  • 7-day return policy
  • Free 30 day/1,500 km warranty
  • 150 point inspection
  • Free Carfax report
  • Optional 24 or 48 months extended warranty 
  • Trade-in available
  • In-house financing
clutch

Clutch

Clutch is an online car buying platform that was established in 2016. Since their inception, they’ve sold over a thousand cars annually. Unlike traditional dealerships, they strive to modernize the used car market into a fast, easy, and stress-free experience. Their online platform allows Canadians to browse their inventory of over 700+ used vehicles. Each vehicle is detailed with information regarding the price, features, and specs. It also has detailed images of the interior and exterior of the vehicle. Moreover, every car on the site has a CARFAX report and undergoes a 210 Point Inspection, ensuring the car is in good condition. 

Clutch isn’t just a platform to find a car, but also provides in-house financing through their partners. Customers can apply within minutes and can get pre-qualified for a car loan to help them choose a car within their budget. Additionally, if you want to sell or trade-in your car, you can do so using Clutch. You can get an estimate of your car value using their online calculator.  

Clutch Main Features
  • In-house financing
  • Sell or trade-in your car
  • 210 point inspection
  • Free 90-day warranty
  • Free home delivery
  • Optional adds-ons: undercoat protection, gap insurance and extended warranty
  • 10 day/750 km free returns 
  • Free Carfax report
Learn More
autotrader.ca

AutoTrader 

One of the more well-known online car shopping websites out there, AutoTrader makes buying and selling a car in Canada easy. With a few clicks of your mouse, you can search for both new and used cars (including certified pre-owned vehicles) according to your preferences such as the car mileage, age, model, colour, price and other criteria. 

You can even find other vehicle types, including boats, motorcycles, snowmobiles, and farm equipment on this site. Plus, you can download the AutoTrader app on your mobile device to make shopping for a car even more convenient. Not to mention, they also have helpful features like price alerts, new listing notifications and a save your search option.

AutoTrader Main Features
  • Buy, sell or trade-in your car
  • Apply for credit
  • Warranty programs
  • Carfax history reports
carpages.ca

CarPages 

Find cars that match your criteria that are close to your location using CarPages’ geo-targeting technology. The site only allows government-registered dealers or identity-verified individuals to sell, so you’ll be dealing only with reputable sellers. CarPages also has its own app for both Androids and iOS. 

Moreover, like Canada Drives, you can use the site to get pre-approved for a car loan before you start your search for your next car. This ensures that the car you select is one that you can afford. Whether you’re looking for a new or used car, you can filter your search results (by price, mileage, or location) to match your preferences. If you have any questions or concerns about the car, you can also ask the sellers and get answers directly from the source.

CarPages Main Features
  • Geo-targeting technology
  • Reputable sellers
  • Get a car loan pre-approval
  • Get free car insurance quotes
unhaggle

Unhaggle 

Instead of spending time perusing the internet in search of the best deal for a car that matches your criteria, Unhaggle will bring the deals to you. Simply enter the details you’re looking for, determine the average price for the car based on your criteria, look over a dealer’s cost report, then be part of a reverse auction whereby dealers put in bids for you to purchase a car from them, not the other way around. Then, Unhaggle will send your request to the top dealers in your area who will offer their best prices.

Unhaggle Main Features
  • Free factory income price reports
  • Free dealer cost report
  • Reverse auction 
Car Gurus

Car Gurus

This dealer-only app will pull up a list of vehicles that match the specs you input. This means you’ll only get a list of options from different car dealerships, not private sale vehicles. While this may mean you’re missing out on some deals, Car Gurus makes up for it with its extra search capabilities. Through it, you’ll be able to filter by the car’s safety rating, cabin size and fuel economy, which is hard to find. Moreover, it will even provide you with a price rating of each vehicle based on what other dealers are charging. Car Gurus can also provide you with an average breakdown of the amount you’ll pay for your car every month to help you budget accordingly.

Car Gurus Main Features
  • No private sale vehicles
  • Get prequalified for a car loan
  • Certified pre-owned vehicles
Types Of CarsTrade-InIn-House FinancingExtra Features

Canada Drives
Certified and used carsYesYes– Car delivered to your door
– 7-day return policy
– Free 30 day/1,500 km warranty
– 150 point inspection
– Free CARFAX report
ClutchUsed carsYesYes– 210 point inspection
– Free 90-day warranty
– Free home delivery
– 10 day/750 km free returns
 – Free CARFAX report
Auto TraderNew and used carsYesYes– Warranty programs
– CARFAX history reports
Car PagesNew and used carsN/AYes– Get free car insurance quotes
UnhaggleNew carsN/ANo– Free factory income price reports
– Free dealer cost report
Car GurusUsed carsN/ANo– No private sale vehicles

Should You Buy A Car Online Or At A Dealership? 

So, which route should you take when it comes time to start looking for a car to buy?

Buy a car online if you: 

  • Like more options and want to scope out all the available deals. 
  • Like comparing prices of many cars to find the lowest price tag.  
  • Are looking for a specific car, which you’ll be able to do more easily online by narrowing your search by make, model, etc.
  • Don’t want to be pressured by any aggressive sales tactics.  

Buy a car with a dealership if you: 

  • Want to take the car out for a test drive before negotiating and agreeing to purchase. 
  • Want to negotiate the price rather than settle for the price advertised online. 
  • Have questions and want to speak to an expert. 
  • Want to build a relationship with a dealer, which can come in handy if you are planning to buy more than one vehicle over the next few months or years. 

Finding The Best Car Loan

Regardless of where you purchase your next car, finding the best loan option is important. But when it comes to choosing between an online lender and in-house financing from a dealership, which is the better option?

Online Auto Financing

Great for any type of consumer, but particularly useful for those who have bad credit or have dealt with financial issues in the past. When it comes to online car financing, your options are almost endless. Just make sure you choose a reputable lender, get a preapproval letter, and compare your options. A preapproval letter from an online lender can even help you negotiate an even better deal with your dealership. 

Online auto financing is best for consumers…

  • Who have poor credit
  • Who are looking for a personalized offer
  • Who need to get approved quickly
  • Who want to shop around for the right deal
Note: Check out the best car loans currently available to Canadian consumers, click here.

Dealership Financing

There are likely dozens of dealerships in your area that can provide you with in-house financing. Typically dealerships work more like a loan broker where they will find a third-party lender for your loan. While they are doing the hard work for you, you likely won’t be getting the best deal. But, like alternative lenders, car dealerships will usually have less restrictive approval requirements. So if you’ve struggled financially in the past, you may still be able to get approved.

In-house financing is best for consumers…

  • Who have poor credit
  • Who have made past financial mistakes
  • Who need help finding a lender
  • Who are looking for convenience

Buying A Car Online vs. At A Dealership FAQs

Are there any good car buying apps in Canada? 

Yes, there are several car buying apps available that will help you find your next car online, including CarGuru, AutoTrader, Unhaggle, and Used.ca, to name a few.

What is a car loan broker?

A car loan broker acts as the middleman between lenders and borrowers to help find a car loan that best suits your needs. A lender is only able to offer you the loan products that it has, whereas a car loan broker works with a variety of lenders, so there are far more products to choose from. 

If I submit multiple online applications to different lenders, will it affect my credit?

When a lender or creditor pulls your credit report to see what your credit profile is like, this is known as a “hard inquiry” and can temporarily pull your credit score down a bit. Multiple “hard pulls” for the same type of loan within a short period of time won’t have a more severe effect on your score and won’t penalize you for trying to find the best loan product.

Is it smart to buy a car online? 

Buying a car online can be a smart move if you’re looking for efficiency and want to avoid negotiating with a dealer. With online car buying, the process is often faster and simpler as online salespeople usually provide quotes right away, giving you the opportunity to pick and choose which online dealer offers the best deal. 

What extra fees can you expect when buying a car at a dealership?

Dealerships tack on numerous fees that can add to the total cost of your car. These include car preparation fees, application processing fees, and vehicle accessory add ons like extended warranties. Be sure to read your contract carefully prior to signing. 

Final Thoughts

These days, you have options when it comes to how you want to buy your next car. And while you can always take the traditional route and buy at a car dealership, you also have the option to purchase online. Be sure to weigh the pros and cons of each before deciding how to embark on the search for a new vehicle.


Rating of 5/5 based on 3 votes.

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

Red American Express® Card

Red American Express® Card
Ends April 30, 2023

Earn up to 12,000 bonus Scene+™ points in your first year (that’s up to $120 towards travel).

View Offer
Cashback & Bonus Offer

Cashback & Bonus Offer
Ends March 1st, 2023

New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.

View Offer
Earn 5% Cash Back With Neo

Earn 5% Cash Back With Neo
No annual fee!

Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.

View Offer
Make No Payments Until 2023

Make No Payments Until 2023
Ends Soon

Borrow up to $50,000 from our partner, Fairstone, and don’t pay until 2023*

View Offer
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.