Think about this. We buy practically everything online. Clothes, DVDs, home furnishings, electronics, even groceries and takeout food. So why are we still buying cars from dealerships?
Here’s the short answer – not all of us are
Having said that, though, buying a car is a huge deal. It’s second only to buying a home in terms of cost and complexity. And when you buy a car from a dealer, a lot of the complexity becomes the dealer’s problem – it’s the dealer who arranges the financing, handles the registration, and collects the taxes. The dealer also relieves you of the problem of disposing of your old car by offering you a trade-in allowance.
That actually doesn’t sound like a bad deal. So maybe the question should be, “Why would anyone buy a car online when it’s so much easier to buy from a dealer?”.
Try Before You Buy
Most people would at least consider buying a car online. So what stops them? It’s the fact that they can’t test drive the vehicle. That’s what keeps dealers in business – the ability to offer a test drive.
That said, the number of dealers is on the decline. And that means that you may be able to find the deal you’re looking for online. One of the best sources for great deals on new vehicles is online auctions.
Once the exclusive province of dealers, online auctions for new vehicles are becoming much more open to the average buyer, largely because of the prevalence of proxy bidding companies. These are companies that hold dealer licenses, and will bid for you at online auctions that you can’t gain access to as a non-dealer.
Using a Proxy Bidder
When buying a vehicle, customers today who buy online are no different from customers who bought years ago from dealers. They want, and expect, a speedy, simple, honest transaction.
The Internet is the new reality when it comes to vehicle purchases, but the principles are the same. You’re trusting your cash to your proxy bidder, so you want to be sure that the company you use is reputable. Usually, a bit of googling will tell you who you can trust and who you should avoid.
Smarmy salesmen, poor service, refusal to honor warranties: these are all problems that customers encounter when dealing with car dealerships. To be fair, though, this has improved a great deal in recent years as dealers become far more competitive when it comes to acquiring and keeping customers.
Now, how does this relate to online auction sales? When you’re looking at a vehicle at auction, the auction site usually has rigorous standards that are required of sellers. In order to list on an auction site, you have to provide documentation about the condition of the vehicle. On a car lot, especially a used car lot, you might not have much more to rely on than the salesman’s word.
Granted, you can’t test drive a car at an online auction. But test driving a vehicle on a used car lot might not provide you with any more guarantee of reliability.
Online or Dealer?
Today, you have a choice as to how you buy a car. You can go to a dealership or a used car lot. You can buy in a private sale. You can buy online through classified ads or online auctions. With all these options available, a dealer may be the least desirable course of action, especially given the standards required of online auctions.
To say the least, online auctions have leveled the playing field. Dealers may well end up being left in the dust.