Buying a car online offers the convenience of browsing and purchasing from the comfort of your home. But before you embark on your online car shopping experience, it’s important to be well-informed about the process, including best practices and potential drawbacks. Read on to find out everything you need to know about buying a car online to ensure a successful transaction.
Key Points
- Buying a car online is easy thanks to the growing number of online resources available, like AutoTrader and Clutch.
- Online vehicle buying platforms offer many resources and tools, including vehicle history reports and pre-qualification capabilities.
- Before you buy a car online, make sure you use a reputable source, a secure method of payment, and obtain a detailed report on the vehicle.
Can You Buy A Car Online?
Yes, you can buy a car online. In fact, you can do everything from browsing, to finalizing a purchase, to arranging financing, and having the car delivered right to your door.
Generally speaking, you can classify buying a car online into two different categories: online marketplace and full-service.
Online Marketplace – When people talk about buying a car online they are typically referring to perusing resale sites, marketplaces, and even websites that belong to dealerships in their area. With this option, you narrow down your search by looking for specific makes, models, features, and location. Once you find what you’re looking for, you’ll visit the seller or dealership to test drive and finalize the purchase.
Full-Service – In the past couple of years buying vehicles online has evolved. You can now buy a car completely online, from start to finish. Companies like Clutch, and AutoTrader.ca allow consumers to find the right vehicle, apply for financing, and have the vehicle delivered to them all from their own homes.
Learn more: Should You Buy Your Next Car Online Or At A Dealership?
Where Can You Buy A Car Online?
Several online sites are available that allow potential buyers to search for vehicles in their cities and provinces. Here are a few resources to consider:
Clutch
Clutch is an online platform that makes finding and buying a car easy. You can browse through over 1,000 used vehicles to find one that fits your needs. Their fully online experience means you don’t need to deal with sales associates and never have to leave your house.
You can get pre-qualified for financing online, purchase the car you want, and set up a time for it to be delivered. During the delivery of your vehicle, a Clutch concierge will have all the necessary paperwork for you to sign.
Clutch Features
- 210 point inspection
- Optional 3-month/6,000km warranty or optional extended warranty
- Home delivery
- 10 day/750 km returns
AutoTrader
AutoTrader is one of the most popular car shopping websites in Canada. The platform offers a vast inventory of new and used cars, trucks, SUVs, and other types of vehicles from both dealerships and private sellers. You can use the site to compare prices and specifications to make an informed car-buying decision.
AutoTrader also lets you pre-qualify for a car loan so you understand how much you can afford with ease.
AutoTrader Features
- CARFAX history reports
- Warranty programs
- 30-Day/1,500km warranty (available on select inventory)
How To Buy A Car Online In Canada
To buy a car online in Canada, follow these steps:
Step 1. Determine How Much You Can Afford
Before searching for a car, you should first find out how much you can afford. This includes the car loan costs as well as the additional car expenses like fuel and car insurance.
Step 2: Research
Browse online listings and review their specifications and prices to find cars that suit your needs and budget.
Step 3. Get Pre-Approved For Financing
Getting pre-approved for financing can save you from falling in love with a car that is way out of your budget. You can choose to get pre-approved from your dealership or from your local bank.
Step 4: Contact the Seller
Reach out to the seller or dealership if you have additional questions about the vehicle or would like to see more photos. Depending on how far the car is located, you may want to make the trek to take the car for a test drive, if possible. You’ll also finalize the price of the car before following through with the transaction.
Step 5: Get Financing
Find out what your financing options are and compare each to see which one is most affordable and suits your financial situation best. Then, you’ll complete the lender’s application form and provide all necessary documents, which may include the following:
- Photo ID to verify your identity (ie. driver’s license or passport)
- Proof of residency to show that you reside in Canada (ie. utility bill or lease agreement)
- Proof of income to show that you earn enough to cover your loan payments (ie. bank statements, pay stubs, or employment letter)
Find: Best Car Loans In Canada
Step 6: Complete Paperwork
In addition to the loan application, there may be other paperwork to fill out, such as the bill of sale and insurance forms. Since you’re buying online, this paperwork can be filled out and submitted electronically.
Step 7: Arrange For Vehicle Delivery
Once the purchase agreement is complete, you can schedule the delivery of the vehicle to your home
Advantages Of Buying A Car Online
When it comes to buying your next car online, here are the main advantages you should consider.
- Easy To Filter Results: You can search for a vehicle that matches your specifications exactly. You may even be able to set up notifications that alert you when cars that match your criteria are available.
- No Haggling: When you buy a car online, you typically don’t have to speak to anyone, or not at least until the deal is almost complete.
- Get Pre-Qualified For Financing: Many online platforms also offer pre-qualification for financing. This means you’ll know exactly what you can afford before you start looking.
- Return Policy: When you buy a car completely online, you’re taking a risk. This is why many online companies offer returns within a set period of time, typically 10 days.
- Have The Vehicle Delivered To You: Once you’ve finalized your vehicle purchase, you can arrange to have it delivered directly to you.
Disadvantages Of Buying A Car Online
Buying a car online is not always going to be the right option for everyone. Here are some of the main disadvantages that you should be aware of.
- Limited Price Negotiation: While not having to deal with a sales associate might be a good thing, it also means you may not be able to negotiate a better price. Furthermore, many sites that sell cars online won’t negotiate on the price at all.
- Trade-in Value Can Be Limited: While it’s great that you can trade in your old vehicle when purchasing a car online, you might not get offered the best price. Make sure you know what your old car is worth.
- Potential Shipping Fees: Having a car delivered straight to you after you purchased it online may be convenient, but make sure you know what the shipping costs are and if there are any additional fees.
Cost Of Buying A Car Online
Some of the costs of buying a car online are the same as what you would be faced with if you purchase from a dealer. However, online car buying may also come with some unique costs. Here are the various costs you may have to cover when purchasing a car online:
- Down Payment: This is the amount of money you put toward the vehicle. It lowers the amount you need to borrow and can lessen the interest you pay over the lifetime of the loan.
- APR (Annual Percentage Rate): Most Canadian car loans come with interest and fees. Combining these two gives you the APR. The higher the APR, the more expensive your car loan will be, and vice versa.
- Term: The car loan term represents the length of time you have to repay your car loan in full.
- Delivery Charges: The platform you purchase your car from will likely charge you a fee to transport the car from the dealership to your location.
- Taxes: You may be charged sales tax. The tax rate you’re charged depends on your location.
- Extended Warranties: You have the option to buy an extended warranty pan, which provides extra protection over the standard warranty period.
Learn more: Budgeting For a Car
Tips For Buying A Car Online
To ensure a safe, affordable, and streamlined online car buying experience, consider the following tips:
- Use Reputable Websites. Use trusted online platforms such as AutoTrader, Car Gurus, and Clutch to find your next vehicle.
- Check The Vehicle’s Book Value. Use a source like Edmunds or Kelley Blue Book (KBB) to find out the book value of a used vehicle. This is very important to make sure you pay a fair price.
- Verify The Seller. If you decide to buy from a private seller, make sure to verify their identity and that they have valid contact information.
- Get A Vehicle History Report. Make sure you’re provided with a detailed history report on the specific vehicle you’re planning to buy. This will give you important information such as a history of accidents, claims, repairs, and ownership.
- Inspect The Car Virtually. If possible, ask for several detailed photos, videos, and even a virtual tour.
- Review The Return Policy. See if the resource you’re buying from offers a return policy. And if they do, find out the exact terms and conditions of the policy before buying.
- Use A Secure Payment Method. Avoid cash transactions and instead use a secure method of payment.
Alternative Online Car Buying Option
There are many online lenders and platforms that you can connect you with dealerships you’re pre-approved for. For example, Canada Drives is an online platform that allows you to apply for auto financing online then connect with a dealership. You can quickly complete the online loan application, and Canada Drives will match you with a local auto dealership that offers vehicle options you’re pre-approved for. Then, you can shop around for a car that meets your budget without wasting time.
Final Thoughts
Now that you have a better understanding of the online car buying process, you’re ready to get started. Just make sure you understand your credit and financial profile and have an idea of the overall cost of your vehicle purchase, whether you buy online or in person. The best way to start the process is to use an online resource like Loans Canada’s CompareHub to find the best deals on vehicle financing.
