Buy Your Next Used Car Online

While the auto industry continues to suffer, online used car dealerships are thriving. According to the fiscal reports from the three companies, sales at the three biggest online retailers are up more than a third year over year.

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Josh Sadlier, director of content strategy at auto site Edmunds, says that online used car sellers have changed the used car marketplace. The transparency they give you into the vehicle and buying process gives you the extra confidence to buy that car.

Buying a used car online allows buyers to avoid a lot of the hassles that come with buying a used car at a dealership. When you shop online, you know the car is available and you know the price without having to speak to anyone.

With a bit of knowledge about the online buying process, you can zero in on the car of your dreams while watching your favorite show. When you are ready to buy, a different approach is required.

As you navigate this emerging marketplace, here is what to know.

Online shopping has advantages.

If you take the online route, you won't have the car sold out from under you before you reach the car lot. The car is yours once you put down a deposit and find the right vehicle.

There are other advantages to buying online.

More information. Fees are not revealed until you see the contract. Buying online allows you to see everything before committing to the deal.

No negotiations. Fixed pricing is offered by online sellers for the vehicle and trade-in.

Convenience. You can search online inventories, set up a loan and have the car shipped to your home or office wherever you please.

The warranty was included. A limited warranty can be found in most of these car sellers. They will be happy to sell you an extended warranty for a fixed price.

There are drawbacks to online shopping.

The inability to take a test drive is the biggest problem with buying remotely. Buyers sometimes think the test drive is unnecessary because of the amount of information online. The true look, touch and feel of a car can only be experienced by driving it yourself.

There are other disadvantages to buying on the internet.

There are only used cars available. If you want to buy a new car, you have to go through a franchised dealership.

There are few options for negative equity. Negative equity in the new car loan will be buried by many traditional dealers. If you owe more than your car is worth, the dealer will include it in your next loan. You have to bring that amount to the table with an online transaction.

You can't see it. The online used car sellers have a thorough pre-purchase inspection. It will have wear and tear, but it is a used car. Once the vehicle is shipped to you, you can only see its condition.

There is a limited older inventory. The place to find a $5,000 beater is a car dealership. If you have a limited budget, there are better places to find an affordable car, like your localCraigslist or Facebook Marketplace.

Buying a car online.

Here are the pros and cons of shopping online for used cars.

Take a test drive. If you don't like the car, you can return it, but it's still a hassle. You might have to take a test drive to make a decision. Borrowing a friend's car, finding a similar car on a dealer's lot to test-drive, or renting a car for a longer trial are all options.

You can shop for your own loan. It is always a good idea to shop for a preapproved loan for these car sellers. This step will show you any problems with your credit and give you an idea of the interest rate you will have to pay.

An inspection can be arranged. Since you only have a short time to return the car, you should have it inspected immediately. Evaluate the wear and tear yourself. After that, take the car to your mechanic for a thorough inspection where they can check for leaks or damage to the underside and put the vehicle on a lift.

Take a test drive. If you didn't take a test drive, drive the car when you arrive. Make sure it fits in your garage and is big enough to hold all your items. Before you return the car without a penalty, be aware that you will be limited in how many miles you can drive.

Philip Reed is a writer. You can email articles@nerdwallet.com. The account is called "AutoReed."

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