Consider the geometric algebra definition of 0-vectors (scalar), 1-vectors (vector), and the inner product.
Let $a$ and $b$ be 1-vectors. Then $a + b = c$, where $c$ is another 1-vector.
Now, consider $c \cdot c$:
$c \cdot c = |a|^2 + |b|^2 + 2(a \cdot b)$
Fantastic, easy.
Now, how do I compute $a \cdot b$?
Do I have to somehow relate $a$ and $b$ down to $\hat i$ and $\hat j$ in order to do a computation? In that case, what is the difference between the normal vector algebra method by which I compute $a \cdot b$?
Example of how it would be done in normal vector algebra:
$\hat{i} \cdot \hat{j} = 0$
$a = \alpha \hat i + \beta \hat j$
$b = \gamma \hat i + \delta \hat j$
$\therefore a \cdot b = \alpha \gamma + \beta \delta$
So I think the real question here is, what do we mean by "coordinate-free"?
One way to put it is that we can do algebraic operations with the objects in questions--vectors and tensors and so on--prior to choosing a set of coordinates or a basis.
Such a system naturally relies upon operations that are independent of the choice of coordinates--in your example, a dot product. What a coordinate-free approach really relies on are these coordinate-independent quantities.
For instance, one coordinate-free approach to using tensors might only talk about tensors as linear maps on collections of vectors and dual vectors, defining the transformation law of tensors to counteract the transformations of their vector and dual vector arguments. Operations like contractions, traces, and so on do not depend on the choice of coordinates, and so they are natural to use.
If you're familiar with differential geometry (e.g. through general relativity), then you might have seen index notation. Originally, index notation referred to components in a basis. So-called "abstract" index notation uses the same general look of things but really uses the idea of tensors as maps that I outlined above. So abstract index notation tries to have the convenience of index notation but the power of a coordinate-free approach all combined in a single notation.
A subtle point with differential geometry is that often we say we're working in some coordinate chart: explicitly, a map from the manifold to a piece of a flat vector space, where the components of vectors in that space are the coordinates of a point on the manifold. Think of how we parameterize a sphere into two coordinates--often, two angles. Even if the sphere is embedded in a 3d ambient space, it only requires two coordinates to describe all the points on it. Though the chart is arbitrary, it is often necessary to acknowledge its presence, as much of differential geometry's calculations are actually done in the space that the chart maps to: the coordinate space.
Geometric algebra's approach to differential geometry is different: the embedded view takes any manifold and puts it in an infinite dimensional vector space. While you can parameterize a manifold, having a prescription for that manifold's unit pseudoscalar at every point gives you access to a lot of information without having to pick a parameterization.
In short: if you're looking for a formalism that allows you to do hard computations (with real quantities, chosen from some example or physical system) without breaking into a basis, you're out of luck. I'm not sure any such system exists, or if it makes sense to consider one. Coordinate-free may not really be "coordinate-free" in that sense, but it does mean you can do a lot of algebra on quantities, simplify results as much as possible, and then break things down into a basis to get hard numbers.