We’re living in a time when you can order just about anything online and have it at your doorstep within days or even hours. This has a lot of people wondering, Why can’t this be the case with cars? In fact, Cox Automotive, Autotrader’s parent company, conducted a survey of 2,300 buyers in the fall of 2025 to develop its annual Car Buyer Journey Study, which found that 28% of respondents wanted to complete their vehicle purchase entirely online. Another 63% said they would like a combination of online and in-person buying.
Is buying a car entirely online even possible? The answer’s a little complicated, but we’ll walk you through the current state of car sales and explore where we might be heading.
Buying a Car Online: What to Expect
Nearly every online car purchase will involve a franchised dealer. As the consumer, you determine the degree of that involvement. You might get through the entire process without ever setting foot inside the showroom if you don’t need a test drive and the dealer delivers.
Once you’ve identified the car you want, done your research, and have made the final decision to buy online, the process will involve four distinct aspects:
- Final transaction price
- Negotiating the trade-in
- Negotiating the down payment
- Securing the financing
If the dealer provides a delivery service for online purchases, you don’t even need to visit the showroom to sign the paperwork. The dealer’s team member delivering the paperwork can bring it to you.
Ultimately, your final transaction will be with a local dealer. If you want a test drive, you will typically need to visit the dealership. Often, you can arrange a test drive online. If not, call the local dealer for the model you picked and set an appointment.
If you have questions during the online buying process, you can either visit or call the local dealership for the model you’ve chosen. The dealer may also offer a live chat on its website.
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How the Franchise-Dealer System Works
While 28% of respondents in Cox Automotive’s survey expressed interest in buying entirely online, only 7% ultimately did. Another 40% used a combination of online and in-person resources to complete the transaction, while 53% closed the deal entirely in person.
Why? In short, with a few exceptions, you cannot purchase a new vehicle directly from a manufacturer. The exceptions are Tesla, Rivian, and Lucid, and even then, the rules vary by state.
For every other carmaker, the franchise-dealer system reigns. In this system, dealerships are owned independently of the brands. The brands (Ford, Toyota, Kia, and so on) don’t own dealerships, but the manufacturers and dealers do rely on one another. Although a brand and its dealers work together in many ways, each dealer runs the dealership as an independent business. Even a mega-dealer like AutoNation, with more than 300 dealerships coast-to-coast, manages its stores from its corporate headquarters in Fort Lauderdale, Florida.
While you can use online resources to complete most of the process, the final transaction will still be with a franchised dealer. At the end of the day, car shoppers should take test drives, and many buyers prefer to review documents in person, which ultimately means they end up at a physical dealership.
Why Does This System Prevent Direct-to-Consumer Sales?
Because of this system, buying online today is a transaction between you (the buyer) and a franchised dealer. This is true whether you use the carmaker’s website to find your dream car or use the website of a local dealer. The details of the actual process — settling on the transaction price, down payment, trade-in, and so on — are negotiated between the buyer and a franchised automobile dealer. And that’s the way it’s been for more than 100 years. In fact, most states prohibit car companies from selling directly to the public.
The fight to overcome the legal realities entrenching the franchise system in the U.S. has left countless plaintiffs with substantial legal bills and little more. Over and over again, the courts have upheld the current franchise system. Each state has its own franchise laws; consequently, any effort to overturn the system must be waged state by state.
Without some drastic event, we don’t believe the franchise system will look much different in five years than it does today. However, we think technological advances will streamline the online process, while attitudes toward the dealership’s role will continue to change.
The State of Online Car-Buying: Past, Present, and Future
How has sentiment toward online car-buying shifted over time? While it isn’t new, it gained popularity during the COVID-19 pandemic, and sellers are continuing to evolve the process for buyers and dealers alike.
In the Past
Although buying a car online was available to consumers before 2020, it wasn’t necessarily an option at the forefront of shoppers’ minds.
The circumstances created by the COVID-19 pandemic brought online car buying to the attention of car shoppers and dealers. With many car dealerships locked down, car shoppers discovered online purchasing as a convenient and safer way to buy a car.
In other words, online car purchasing was legitimized in many people’s minds.
Today
Even if you’ve only begun shopping for a car online, you have probably encountered some amazing tech and features many dealers now offer online shoppers, including:
- View inventory: You can use the build-and-price tool on a carmaker’s website or skip right to clicking “Current Inventory” for whichever model you want. You can look at inventory in your local area, your state, or nationwide.
- Detailed information: As you peruse the available stock, you can pick a vehicle and often learn its details. Such data can include standard features, specifications, warranty information, and more. You can find the vehicle’s identification number (VIN) and often access a copy of the window sticker, also known as the Monroney label.
- Virtual walkaround: Where we used to have to travel to a dealership or settle for a series of online photos, today, many dealer websites offer a 360-degree virtual tour of the vehicle. These tours aren’t only for the exterior but also for the interior.
- More online tools: You can usually schedule a test drive, request a price quote from a dealer, and receive an estimated monthly payment online.
Some dealerships now provide a dedicated internet sales manager to work with remote shoppers. However, this feature is not widespread. More often than not, if you have questions during the online buying process, you will find yourself speaking to a showroom salesperson.
We also want to note that as online car-buying becomes more widespread, it attracts more scammers. There is a growing trend of fraudsters using AI to spoof legitimate dealer websites. Always be vigilant and keep yourself safe when shopping online.
In the Future
Boosters of e-commerce would have us believe that soon the franchised dealer will be little more than an observer of the online buying process. In other words, the dealer’s role will be to supply test-drive vehicles, deliver purchased cars, and perform scheduled maintenance and repairs. Far in the future, that might be the case; however, in the foreseeable future, dealers have a dependable ally in the franchise system and the courts that steadfastly uphold it. That’s not going to change anytime soon.
Dealers are continuing to adapt tools and processes to fit the growing demand for online buying. However, there are still gaps between what consumers want to do online and what they ultimately do. For example, 48% want to apply for credit online, but only 33% do; 40% want to select finance and insurance (F&I) products online, yet only 16% do; and just 19% finalize price online despite 37% wanting that option, according to Cox Automotive data.
These are opportunities for improvement in the tools and educational resources available to consumers from dealerships and third-party sellers online. The smoother the process, the more buyers will be able to trust in it and return the next time they are in the market for a vehicle.
The Bottom Line
Online shopping isn’t going anywhere, and as it continues to be a viable option for car buyers, sellers will need to keep adapting their processes and adopting tools to make the process feel seamless. The dealer-franchise system also isn’t going anywhere in the foreseeable future, but shoppers no longer need to dread an endless, drawn-out day at the dealership to complete their transaction. They can research, assess financing options, and in some cases, complete the entire transaction online. For now, a happy middle ground seems entirely possible, one where a buyer can complete as little or as much of the process online as they wish, and still have the option to test-drive and finalize the transaction in person with a knowledgeable dealer if they choose.
Check out our Buying hub page for curated articles, resources, and tools to help you go into your next car deal with confidence.
Editor’s Note: We have updated this article since its initial publication. Russ Heaps contributed to the report.
