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How to Buy a Car Online Wisely


A happy family and their dog driving a new car they bought after learning how to buy a car online.

If you are ready for a new auto but not ready for the hassle and stress of haggling in the dealer’s lot, you may be wondering: Can I buy a car online? The answer, of course, is yes! But perhaps the question should really be: what is the BEST way to buy a car online?


That’s because car buyers today have almost limitless options when it comes to internet-enabled car purchases, from researching models to arranging final delivery, not to mention accessing the financing you need. Virtual car buying is definitely an option today.


Let’s take a closer look at how to buy a new car online, including key steps in the process and some smart tips for getting the best online deals for your new auto.


Clicking the Tires: How to Buy a Car Online


Once upon a time, if you were in the market for a new car, you were pretty much limited to whatever your local dealership had on their showroom floor, with no way to compare the asking price for a model with what another dealer might be offering.


The internet has changed all that. Today, you can search online for the make and model you want and compare prices to find the best deal in Arkansas or beyond. You can also connect with dealers online, compare prices and options, and even pay for a car online—avoiding all the hype and high pressure of the in-person buying experience.


6 Steps to Buying a Car Online


If you’re ready to take charge of your online auto-buying journey, then grab the wheel now—we’re on our way!


1. Set a Budget


First things, first. Know what you can afford to spend before you start looking. Buying a car is a major decision, and being unrealistic about how much you can spend can get you into trouble.


You’ll need to look at how much you can afford to spend on a monthly auto loan payment as well as all the other costs associated with buying a car. Most experts recommend not spending more than 10-15% of your monthly costs on all of your car-related transport costs. F


For example-if you can easily afford a monthly car payment of $400 per month this is helpful while shopping online.


You should also think about a down payment on a loan. The more you can put down, the less your loan will cost you over time. A good down payment is usually 10-20% of the car’s value.

2. Check Your Credit


At the same time, check your credit score. You can do this for free online or by contacting one of the credit bureaus (Experian, TransUnion, or Equifax). Knowing your credit score will let you know whether you’ll be able to qualify for an auto loan from a bank, credit union, car dealership, or specialty lender and how much interest you’re likely to pay on your loan. A credit score below 630 may double the interest rate charged on a vehicle loan.


If you have time to work on raising your credit score, paying off negative items, or building positive pay history it can help you qualify for a higher car loan as well as provide a lower interest rate. Visit www.greenpath.com/telcoe for a free credit report review and tips on raising your score.

3. Get Pre-Qualified


Another good way to get an idea about the type of car loan you will be able to qualify for is to apply for online pre-qualification with banks, specialty auto lenders, and credit unions. Pre-approval can involve a hard or soft pull of your credit history that can affect your score. By visiting with Telcoe first for your preapproval we can provide you a copy fo your credit report and your score to allow you to compare rates without multiple credit inquiries.


While you want to earn the annual percentage rate (APR), you can and be able to afford your monthly payment, be cautious of loan terms of five years or longer. You will pay a lot more interest while your car’s value will continue to decline.


4. Do Your Research


With a clear idea of what you are likely to be able to afford in terms of financing, it’s time to get clicking to learn more about car makes and models you might be interested in. Start with must-have features that you need in a car, including size, fuel efficiency, and safety features. Then research further by:

  • Visiting automakers’ websites to learn more about specific models

  • Read reviews and ratings on sites like JP Powers and Consumer Reports

  • Check Kelley Blue Book or NADA or Edmunds to see the book value of a model

  • Browse online marketplaces to get an idea of pricing

  • Look for deals or special offers at local dealerships

  • You may also consider www.carvana.com

5. Arrange Financing


Once you have a specific vehicle in mind, there are a couple of ways to proceed. You can contact dealers directly and seek financing through their own approved lenders or you can approach your bank, credit union, or specialist online lenders for a pre-approved loan. Keep in mind that the dealership partners with lenders that allow them to mark up the loan rate, sell add-on products such as an extended warranty, gap protection, and oil change packages. These products are negotiable, just like the vehicle.


At most banks and credit unions, you can apply for a loan entirely online and you will usually know within hours whether you are approved. A copy of the purchase order/bill of sale is all the credit union needs to help prepare your check for your vehicle purchase.


6. Contact Dealers


If you have not been in contact with dealers yet, now is the time to do it. Most dealerships are used to being approached online and the negotiation process is often more straightforward and transparent because the high-pressure sales tactics of face-to-face negotiations are removed from the equation, especially if you already have financing in place.


While buying a vehicle sight unseen and having the car delivered to your home is possible, it’s probably a good idea to take a test drive before making a car purchase. This could be the first in-person interaction you have in your car-buying journey. It is important that you leave the dealership to complete your final price negotiation. Once you leave the dealership and have access to your computer to research pricing, etc you can call the dealership to make your offer. This can help you save thousands off the price originally offered. The more time you take to negotiate, the more can potentially save.


7. Complete Your Purchase


Choose your car, check the vehicle history report(most dealerships online will provide this report for free), and agree on a price with your dealer. While there may be additional charges, don’t get talked into add-ons like optional extras or extended warranties unless you can afford them in your budget.


You’ll need to contact your lender to get final approval for your loan.


How to Get the Best Online Deals


That’s the skinny on online auto buying. Done right, it can be fast, convenient, and hassle-free but getting the best deal still takes a little bit of legwork even if you are sitting at your keyboard.


Be Prepared


The biggest advantage of buying a car is having an almost unlimited amount of information at your fingertips. Use it. Make sure you know everything you can about the car you have your eye on before approaching a dealer—from available model specifications to price ranges.


Shop Around


The car market is now a national market. There’s no need to confine yourself to your town, city, or even the state of Arkansas if you’re comparing prices online. Look at a lot of cars—after all, clicking is a lot easier than pounding the pavement at dozens of dealerships!


Look for Bargains


Buying online also makes it easier to find deals. Hunt for models that meet your needs but might not be selling as well as the maker hoped, or models that are about to be replaced by the next year’s version. Keep an eye out for short-term deals or special pricing for first responders, military families, or teachers.


Talk to Credit Unions


As community-based lenders, credit unions are owned by their members. That often allows them to offer rates lower than commercial banks and other lenders and also means they’re more likely to take a personal interest in your case because their success is tied to yours.


Get Pre-Approved


Credit unions like Telcoe Federal Credit Union are also likely to be more flexible in working with you to arrange financing before you contact a dealership. This allows you to go shopping online or in person with “cash in hand” and makes it much harder for dealers to make you pay more for the car by manipulating the terms of the financing they will give you.

Telcoe Federal Credit Union Makes Buying a Car Online Simple


At Telcoe Federal Credit Union we know how important a car is to getting where you want to go in life. That’s why we’ve made buying a car at a great price even easier for our members with Telcoe Federal Credit Union’s Car Buying Service, powered by TrueCar®.


Our service allows you to:

  • Search top brands with discounted, upfront pricing

  • Lock in big savings over standard showroom prices

  • Secure a Telcoe auto loan that works for you

  • Head to the dealer to pick up your car

Telcoe Federal Credit Union is proud to call Arkansas home. We’re dedicated to keeping the Natural State moving forward with innovative ways to find and afford the car of your dreams.


Click below to learn more about how Telcoe Federal Credit Union puts you in the driving seat.


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