Determine your budget

The first step in any car-buying process — whether buying a used car online or searching for a new car — is knowing your budget and sticking to it. Walking into any car-buying situation with a firm budget will help quickly narrow down your options and keep the car buying process simple. Our car loan calculator and other car buying resources can help you find a budget that works for you.

Have a plan for financing

How will you pay for the car? If you plan to pay cash, it needs to be immediately accessible. But if you plan to finance the vehicle, you can get financing from a third party or explore the options from the online used car-buying site you ultimately select.

With your budget in mind, if you're financing, you'll want to find the best interest rate available. Often, starting with your bank is a solid first step. Find out what interest rate they offer, and then you can shop that against other banks in your area, the site you're looking to purchase from, or other online lenders.

Find your vehicle

Here's where your search starts to gain traction. There are many different sites and online platforms available for buying a used car online, including:

  • CarMax
  • Carvana
  • Shift
  • TRED
  • Auto Trader
  • eBay Motors
  • Vroom

Likewise, many local dealerships have started offering online car-buying options — both for new and used cars — to compete with online rivals, so you may have options closer to home as well.

Keep in mind that if a site or dealership is selling a car, you'll want photos of the actual car, not just stock photos. Also, make sure they supply the VIN so you know the vehicle is in stock. If you choose a local retailer with an online option, you're still free to walk the lot and look — or even go for a test drive — without face-to-face negotiations. If a test drive isn't available, you may still get an in-car feel with a virtual test drive of a similar make or model or a 360-degree view of the car.

Know the value

Use online resources such as Kelley Blue Book to understand the value of the car you're looking at. This helps ensure you're not paying too much. Many sites will offer AutoCheck or CarFax history reports on the vehicle, which could bump up or down the car's value.

Finalize the price and negotiate a deal

Depending on the route you choose, your online used car buying site might have a set price that isn't open for wiggle room, or you might want to choose a more traditional site that still allows for negotiations.

For fixed prices

If you're working with a fixed price, check it against the value of the vehicle and your budget. Then you should see what else is included in the purchase price, including benefits like auto warranties or a money-back guarantee, as well as any additional fees. You'll at least need to pay taxes, title, and registration fees when you buy the vehicle.

For negotiated prices

If you're working with a traditional dealership online, negotiating via email may prove less intimidating. Negotiating online can give you the upper hand in timing the dialogue. It also allows you to negotiate a price with multiple parties at one time and takes some of the pressure off. Just make sure to get everything in writing — including all fees.

As you negotiate, you might consider asking for a grace period to take a used car to a trusted mechanic who can check under the hood and give you additional information you may not have otherwise received about the car's current state.

What about a trade-in when buying a used car online?

It's common for online used car selling sites to buy trade-ins, so shop your vehicle with Progressive’s car shopping service and see if you're getting a fair deal. Checking online for the value of your car when you're researching your next car will save a little time — and give you a clear picture of the real financial impact.

Receiving the car you bought

Many online used car buying sites offer delivery of your vehicle to your driveway with document signing online, while some have locations where you can pick up your vehicle. Local dealerships may also offer home delivery and have you sign at that time.

The company you purchase from may offer a grace period for test driving the new vehicle, no strings attached.