Pros and Cons of Buying a Car from a Car Dealership
Photo by Connor Lunsford on Unsplash

So, you’re ready to buy a new car. There are more options than ever these days, but they pretty much all come down to two main categories:

  1. Buying a car from a private seller that you found online
  2. Buying a car from a car dealership

Which one should you choose? There are plenty of pros and cons to buying a car online and buying a car at a dealership, meaning the best choice depends on what’s important to you. Here’s a list of the pros and cons of buying a car at a dealership to help you decide whether or not this option could work for you.

How Should You Buy Your Next Car? Pros and Cons of Buying a Car From a Car Dealership

Pros of Buying a Car at a Car Dealership

  • You can view a variety of cars in person, and you can test drive the ones you’re most interested in.
  • You can get help with financing your car.
  • You’ll have options to protect your purchase, such as warranties.
  • If you buy a used car at the dealership, you might be protected by lemon laws, which can protect you if your car turns out to be a piece of junk. Not every state has this law on the books, though, so make sure you review your state’s position on lemon laws before buying a used car.
  • A dealership might offer you a vehicle history report on used cars you’re interested in, although those reports aren’t always a completely reliable method for learning if the car has been damaged in the past.
  • Going to a dealership means you could look into leasing a car instead of buying one. You might also have the option to trade in your current car, helping you knock down the price of the new purchase or lease.

Cons of Buying a Car at a Car Dealership

  • You could get stuck paying hidden car dealership fees.
  • You might find yourself haggling with a professional salesperson.
  • Not all, but some dealerships employ a “bait and switch” — that’s when you call to ask about a car, come in to look, and are told that it’s gone but there are other (often more expensive) models to look at instead.
  • The process of buying a car at a dealership can be a long, often multi-day endeavor.
  • Many warranties require you to get any work done on the car at the dealership’s service center, some of which tend to get negative reviews.
  • If the dealership you go to doesn’t have the exact make and model you want, you could end up driving all around town to find it.

How to Make Sure You End Up With a Good Deal No Matter Where You Go

Trying to close a deal on a new car (or a new-to-you car) can be a lot of pressure. You may have an urgent need to replace your car, and the seller needs to move theirs off the lot (or driveway, as the case may sometimes be). Don’t succumb to the pressure just to get the deal done.

This is a purchase you’re going to be living with for years to come. Your auto loan alone could tie you to a car for four to five or even six years. Keep a cool head to ensure the car you’re about to buy is both what you want and what you need. Then get all the details you can about its history if it’s used and do some research on the car’s value, so you’ll understand whether or not you’re getting a fair price.

And if you have to walk away because the deal is starting to seem like a bad one, do it. Sometimes it takes going to another dealership or seller to get the deal you need.

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How are Car Dealerships Faring in the Age of the Internet?

One almost has to wonder how car dealerships are faring overall now that it’s easier than ever to purchase a car online. Well, according to data from the National Automotive Dealers Association (NADA), they seem to be doing reasonably well.

NADA published a 2018 financial profile of new-car dealerships, which stated that car dealerships in the U.S. had overall sales of more than $28 billion in 2018, with the average sales per dealership coming in at $30 million.

As for what consumers were spending, the average price of new cars sold at new-vehicle dealerships in 2018 was $35,249, while the average price of used cars sold by the same dealerships was $20,390.

So, how much did they spend to reach these sales? The profile says that the average advertising spend per “new unit” per year was approximately $625 in 2018. That led to a total of $4.51 billion in total advertising spend for the year.

In other words, new-vehicle car dealerships spent about the cost of three months of car payments to get consumers in the door and into a new car.

All in all, car dealerships are working hard to get people in the door, and internet car shopping doesn’t seem to be hampering their results – what’s more, people’s ability to search online to narrow down their choices (including on car dealership websites) could be becoming a standard part of a shopper’s experience. Although people can now buy cars privately online through Craigslist and online-only car sales websites, it seems that traditional car dealerships’ sales are still going strong.

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