Ah, car shopping. Maybe you need to replace your college beater, treat yourself to something nice under $30,000, or even indulge in a second, fun car. Regardless of your shopping goals, you have plenty of options ahead of you. You could buy from trusty Carmax, trendy Carvana, an old-fashioned dealer, or even a private party off of Craigslist or Autotrader.
So where to start? Well, before even considering who you’ll buy from, be sure to follow our Money Under 30 Car Buying Guide to ensure you’re getting the best deal for your new and old car.
Now, who to buy from?
Where to buy your next car overview
|Car Buying Option||Best For|
|Edmunds||Researching car brands|
|Dealer||Buying a new car|
|Private Seller||The best possible deal|
|Carmax||Test-driving many cars|
How to find cars online
Researching cars online should be your first step in the car buying process. We recommend using Edmunds—a well-known car review site. You can find prices and reviews for new and used cars. Edmunds will also show where you can buy the car of your choosing, either through private sellers or traditional car dealers.
You should use Edmunds if…
You want to do a lot of research before buying a car (which we highly recommend). There’s absolutely no harm in using Edmunds. Their reviews tend to line up with most other reviews, so you can trust their honesty.
Plus, Edmunds is incredibly easy to use. You can search buy car type, year, mileage, and whether or not you want a new or used car.
You shouldn’t use Edmunds if…
You want to test drive cars as you use them. Obviously, Edmunds can only do so much for you. If you want to physically see the car your researching, you’ll have to go to dealer, or a place like CarMax if you want to test drive a wide variety of cars.
Should you buy from Carvana?
Seizing headlines with their amazing car vending machines, Carvana launched in 2012 with the slogan “Skip the Dealership.” Boasting a 100% online car-buying process, Carvana promises that because they have such low overhead, they can sell cars much cheaper than competitors. They claim that they’ve saved customers $134 million since opening.
You should buy from Carvana if…
You’re a fan of Amazon Prime and UberEats, and would like to buy a car the same insanely convenient way.
Carvana enables you to browse over 10,000 cars, upload all necessary documents and payment information, and have your new toy delivered to your door within 24 hours. Plus, similar to Carmax, Carvana offers a seven-day return policy, and you’ll save hundreds if not thousands buying from Carvana.
You shouldn’t buy from Carvana if…
You’d like to test drive a car before buying it.
This is perhaps Carvana’s biggest fault; the only way to “test” one of their cars is to buy it and return it. Plus, if you like to see, touch, and ask questions of a car before making a buying decision, Carvana’s online-only process probably won’t appeal to you.
Should you buy from a dealer?
After being abandoned by Millennials and bullied by the competition, dealers have gotten a bad rap. However, there are a few distinct advantages to considering your local car salesman.
You should buy from a dealer if…
You want to buy a new car.
Dealers are the only vendors of new cars on this list, and you might want a new car because you plan to lease, customize from the factory, or just enjoy the new car smell.
Also, unlike Carmax or Carvana, dealers are open to negotiation, and are often under pressure to move inventory and give you a deal. For example, 2016 Mazda MX-5 may be $23,000 from Carmax or $22,000 from Carvana, but $18,500 from a dealer desperate to get it off the lot to make room for more Chevy trucks.
You shouldn’t buy from a dealer if…
You are looking for an easy buying experience.
The pressure to move inventory and meet quotas is a double-edged sword. While you can score a deal, you may also be subject to manipulative and high-pressure sales tactics.
Furthermore, while Carmax and Carvana are national companies, dealers are privately owned, and the customer service experience varies between them.
Should you buy from a private seller?
Autotrader, CarGurus, Craigslist, even Facebook Marketplace: These are the Wild West of car-buying. You stand to strike gold, but not without risk.
You should buy from a private party if…
You want the absolutely best possible deal and can accept the risks.
Every other vendor on this list has overhead that must be factored into the final price: brick-and-mortar, salaries, marketing, etc., but Jennifer on Craigslist has none of these, and just wants to sell her Jetta ASAP so she can finally buy a Porsche Macan.
Private sellers generally set their price to Kelley Blue Book value, but every ding and tear you can find during your inspection is a bargaining chip to negotiate the final price to thousands below what a dealer would charge.
You shouldn’t buy from a private party if…
You want to trade your car in.
Private sellers generally have no interest in your trade-in vehicle and want a full cash amount. Plus, either you or the seller will have to pay $150 for a mechanical inspection, which itself may not catch every issue, like rust or failing electronics. The car will come “as-is” with no warranty or return option, and you and the seller are responsible for 100% of paperwork like the bill of sale, title transfer, registration transfer, taxes, fees, and more that a vendor would otherwise deal for you in the background.
Should you buy from Carmax?
Carmax is the nation’s #1 retailer of used cars, selling around 500,000 used cars per year. In business since 1993, Carmax has become the Target of used cars, synonymous with a dignified and painless buying experience.
You should buy from Carmax if…
You like test-driving lots of cars before you commit (and you should).
Carmax lets you test drive as many cars as you want, no paperwork, no questions asked. Being a 100 Best Places to Work, Carmax is also full of friendly staff who work on salary and won’t pressure you into a sale.
Carmax also offers generously cheap warranties, a friendly seven-day return policy, and only sells dependable cars that pass its 125-point preowned inspection process.
You shouldn’t buy from Carmax if…
You want the absolute best possible price on a car.
Carmax makes around $2,100 profit per car sale, compared to a dealer’s $1,400 and Carvana’s $950. This means that you can expect to overpay by about $1,000 for a car from Carmax. However, given the high quality of their cars, amazing warranties, and the painless shopping experience, this may be worth it to you.
Buying a car is taxing business. If you’re in the first phase of buying a car and looking for a loan to pay for it, check out our partner, Prosper.
Once you decide how you can afford a car, your first several months should be spent just researching and test-driving. Once you have a specific model picked out, this puts you in a much better position to shop and negotiate like a pro. Then, weigh the pros and cons of buying your particular model from each of the options above.
Is your car notoriously unreliable past 100,000 miles? May want to buy from Carmax to get that sweet warranty. Is your car just a cheap two-seater you’ll barely drive?
You may find a steal from a private party who babied it and barely drove it. Get a bonus on Friday and just want your dream car to arrive in time for Monday’s commute? Head to Carvana.com.
Car buying can be daunting, but through tact and patience, you can score a killer deal and drive off into the sunset with a smile.