If you are in the market for a new car, it is important to be aware of the potential pitfalls. These car buying tips for single moms will help you get the best car for your money. There are many things to watch out for, and many of them I have personally experienced. I will share with you five things to beware of so you do not become a victim of a car buying nightmare.
Stand your ground if You are a Single Mom Buying a Car
Some salespeople are aggressive and will try to pressure you into buying a car that you may not even want. If you feel like you are being pressured, walk away, and take your business elsewhere. It is important you do some research before you go to the dealership and have in mind a couple of vehicles that you want or may be interested in. Doing the research ahead of time will help you remove the indecisiveness and being pressured into a car you do not want.
I will use myself as an example. I was leasing a Dodge Charge R/T with the hemi engine, my most favorite car ever! When the lease ended, Ford bought the Dodge dealership, and I did not know until it was time to return the vehicle. In my mind I thought I would get another Dodge Charger and had absolutely no idea what I wanted other than that. Long story short, I ended up with a Ford Edge that was newly released. I have no knowledge of Fords or really any car for that matter and I had nothing, but problems with the vehicle, even though some people love Fords. I was under a lot of pressure, because my lease was up, and I had no vehicle to get back and forth to work, which I will take the blame for that. However, the salesperson knew I needed a car. I was told I was approved with a specific payment, but that amount changed when I arrived. I was pressured into a higher payment than I originally agreed to, and felt like I had no other option. One of my many not so good car buying experiences.
Avoid Hidden Fees When You Buy A Car
Many dealerships will try to add on hidden fees that can end up costing you hundreds or even thousands of dollars. Be sure to read all the fine print before signing any paperwork. These fees can be something small or simple such as weatherized mats that you thought were being covered by the dealership as a bonus to buying the car, but it is actually an extra charge for you.
Extended warranties, maintenance plans, processing fees, are examples of fees that are not hidden, but you may not be expecting them. When you're a single mom on a budget, fees such as registration fees and sales tax can take a big percentage. People think the amount on the sticker is the final cost, but we must remember all these other fees above. One of the best car buying tips for women, whether you are financing the vehicle or paying cash, is to not forget these additional amounts.
Watch Out for Lemons When Buying a car as a Single Mom
A lemon is a car that has major defects and is not safe to drive. If you suspect that you have been sold a lemon, contact the Better Business Bureau, and file a complaint. There are lemon laws in place in most states to protect buyers in the event this happens. Remember that Ford Edge I talked about? That was a lemon! The transmission started going after about 20,000 miles. It was because of the modern technology in the vehicle. Unfortunately by the time I started having issues with it, the miles were past the lemon law qualifications. However, most of the repairs were covered by the dealership after having the same issue over and over.
Unfortunately, if the vehicle is brand new it is impossible to know if it will be a lemon. If you buy a used vehicle, I recommend certified pre-owned. That vehicle has gone through multiple checks by the dealership to ensure it is at the manufacturing standards. Certified pre-owned cars also have low miles on them, which usually means there was not a lot of wear and tear from the previous owner. You will get a ton of use out of that vehicle, and you will benefit from buying it after it has depreciated.
Single Moms: Watch Your Budget When Buying A Car
Not all car lots have integrity. When you are dealing with a shady dealership, they are focused on their bottom line and whatever profit they can make off that vehicle. They are business owners, so that is understandable. However, to avoid this, be sure to do your research ahead of time, and get quotes from several different dealers.
Also use tools like Kelly Blue Book or Edmunds for an idea of what that vehicle is valued at. Having this information will help you avoid the headaches and being overcharged. Unfortunately, dealers might think women do not know about cars or that we might be unsure of ourselves in this situation. Arm yourselves with all the information you can so you can stand your ground when negotiating the final price of your car.
Many people end up getting stuck with sky-high interest rates or other unfavorable terms. To avoid this, prior to going to the dealership, obtain financing. Paying upfront for a new vehicle is usually not an option, therefore most buyers use financing. The financing option you choose will impact what kind of vehicle you can afford and how much you ultimately end up paying for the vehicle.
It is important to shop around to find a financing option that is right for you. Compare loans and different lenders to find one that is affordable and that will provide you with a pleasant experience. Ask around for recommendations from people you trust. Remember, if you have multiple lenders checking your credit score, those inquiries will cause your credit score to go down, be careful to not try too many lenders. For more tips on debt consolidation and financing, click here.
Typically, having a good credit score will make finding affordable financing easier. Consider applying for a loan via a bank, credit union, or online lender instead of the car dealership. These other institutions are usually more affordable if you have good credit.
Finding an affordable loan is also easier if you have a trade-in or a down payment so that you do not have to finance the entire cost. Ideally, your trade-in or down payment should cover 15% to 20% of the cost of the new vehicle.
The main thing to look at when comparing financing options is the total amount of the loan. You can use online tools to compare rates offered in your area and get an idea of how much a loan will cost you.
Here are a few car financing tips for single moms (and everyone else, too). Compare these items when you are looking for an auto loan.
- The APR or Annual Percentage Rate. The APR will impact the total amount you end up paying for the loan and for your vehicle.
- The duration of the loan. A shorter loan means you can build up equity in the vehicle faster and end up spending less on fees and interest. A loan with a longer duration means your monthly payments will be lower.
- Late payment fees. Ideally, you should not miss any loan payments, but it is important to know how your balance will be affected if you do.
- Monthly payments. Monthly payments are important because you want to find a loan that is a good fit for your budget.
- Insurance premiums. You should purchase enough insurance to cover the amount of the loan. Ensure you can afford the insurance premiums.
- The reputation of the lender. You will have a more enjoyable loan experience if you borrow from a company that has a good reputation. A 5-star car dealer should offer good customer service, provide you with an easy way to make your payments, and not make mistakes when processing payments. I always start with my credit union. They usually have the best APR rates, and are the most dependable.
- The terms of the loan. Read the terms of the loan carefully and look for additional fees, variable interest rates, and other details that were not mentioned by the lender. Be sure to read the finance agreement before you sign regardless if it is at your bank/ credit union or dealership. You are not responsible for the loan until you sign. If it does not feel right, or you feel more comfortable taking your business elsewhere, than do it. Once you sign, it is now your responsibility to pay back and the vehicle is yours!
Having financing before you go to the dealership will make the process seamless. There will be no need to deal with the finance manager and do the back-and-forth negotiations or feel like you are not being treated fairly because you did not go in ready to pay cash.
Another car buying tip for us single moms is to understand what happens if you trade in a vehicle that is not paid off. I learned this through my many car buying experiences. If you are trading in your previous vehicle, and the vehicle will not be paid off completely by the dealership, you will have to finance the additional amount into your new vehicle loan. Yikes! I know, that is how I felt when it happened to me the first time. That additional amount will change the amount of the monthly payments you had in mind, the loan terms, and the overall amount you are financing, if you are not paying cash.
What other car buying tips for women do you have? What can you do to avoid being taken advantage of when buying a car? Here are five key points to keep in mind:
- Don’t be pressured into a purchase
- Watch out for hidden fees
- Lemons do not always make lemonade
- Research prices online
- Obtain financing on your own.
These tips will not guarantee a perfect car-buying experience, but they will help reduce your chances of winding up with buyer's remorse or worse. Have you ever been defrauded when buying a car? Share your story in the comments!