Buying a Car Online: Pros and Cons

 

With the Covid-19 pandemic closing in on the two-year mark, never has online buying been more popular.  This applies to goods that have always been popular to purchase online such as restaurant meals, jewelry, clothing and books, but also more unusual purchases like buying a car online.  Shopping for car insurance online has been popular for some time now, and in fact, it's estimated that more than 70% of those buying car insurance last year began by going online to do some research.

What's really surprising is that, according to J.D. Power, about 2/3 of consumers buying new cars do their shopping online.  The Internet is an incredibly useful tool for those doing their "due diligence" by researching products before putting their money down, especially with higher-priced items.  Keep in mind that there's a difference between shopping online and buying online.  Shopping for a car online includes:

• Researching a particular model car
• Finding cars that are listed for sale
• Comparing different models of cars
• Calculating car loan rates and payments
• Determining what their current vehicle is worth
• Obtaining car dealer information

You may also utilize social media in your search for buying a car by chatting on dealer websites and even negotiating with dealers.

Pros and Cons of Buying a Car Online

Deciding whether or not to buy a car online will depend on just what you're looking for in a car-buying transaction.  Buying online can be fast, convenient and without the hassle of having to deal with a car salesman.  But if you're the type of person who wants to see, touch and smell your potential vehicle while taking it out on a test drive, then an online purchase might not be right for you.  Here are some of the pros for online car purchasing:

• Streamlines the process, saving time from the traditional in-dealership experience
• Offers a car deal with no negotiations, no haggling and no sales pressure,
• Shop at your convenience.
• Take delivery at home or anywhere else you choose.

Here are some cons:

• Inability to inspect (see and feel) the car you're buying.
• Less chance of taking a test drive.
• Less ability to negotiate a price.
• May restrict your financing options.
• Getting a fair price for your trade-in may be difficult.

Whatever you decide, know that thousands of people are successfully buying cars online today and the trend only seems to be getting more popular.

Using Risk Analysis to Understand Coverage Needs

 

Risk analysis, which is the process of assessing the probability of an adverse event occurring, can be invaluable in helping determine your specific insurance coverage needs.  The entire insurance industry revolves around the reality that risk is an unavoidable factor in everyone's life.  By buying insurance coverage, whether it's life insurance, auto insurance, home insurance, liability insurance or any other insurance coverage, you're sharing the risk of accidental financial loss in your life with your insurer.

Risk analysis involves the study of the uncertainty that risk plays in your life.  If you drive a car, you run the risk of being involved in a collision, of injuring a third party or causing property damage, of having your car stolen or vandalized or of having a tree fall on it and crushing it.  There is insurance to help protect you from the financial loss that any of these risk factors may cause you if realized.  If you drink before driving, regularly break the speed limit or use your cell phone while driving, your risk of suffering an accidental loss skyrockets.  Conducting a comprehensive risk assessment will uncover the dangers you face.

The Risk Assessment Process...Also Known as Underwriting

When you apply for an insurance policy, whether for your car, your home, your life, or anything else, the insurance company goes through the process of underwriting, also called risk analysis or risk assessment.  They do this to determine the likelihood of whether offering you insurance coverage appears to be a good investment on their part.  If a policy is offered, risk assessment also helps determine the amount of premium you should be charged for your coverage. 

The process of risk assessment begins with identifying any hazards that could potentially cause harm.  For home insurance, a home inspection is typically conducted to uncover any risks or hazards that could lead to the homeowner later submitting a claim.  For car insurance, a check is made of your driving history to uncover any factors such as speeding tickets or DUIs that could indicate behavior that could lead to future accidents.  For life insurance, your family health history is looked at, as well as unhealthy habits such as cigarette smoking.

You can use the information uncovered by these assessments to do your own personal risk analysis to determine changes you need to make to help alleviate or reduce these risks.  Lower risks mean increased security.