Buying a Car...Thrive-StyleBuying a car can be a daunting and confusing task, especially for us girls. When a girl walks on to a car lot, plenty of car salesmen assume we don't know what we're doing, and they can take us for a ride. (No pun intended) I've seen it first-hand; I've worked at a car dealership. So, how is a single mom supposed to buy a car for herself without sacrificing her pride or getting screwed? Read on for the insider tips, girl! 1. Do the MathThe first step for buying a car is to determine how much you can spend. If you haven't made up a monthly budget yet, now would be a good time to do that. For help planning a budget, check out Tips On Budgeting for the Savvy Single Mom It's best to buy a car in cash. If that statement just made you laugh out loud in exasperation, let's figure out how you can finance your car. Once you've made up a budget, you'll be able to pinpoint how much of a car payment you can afford. Be sure your budget still has some wiggle room- you don't want to bite off more than you can chew.Plan to make a down payment. Anything you can save up will help you get a loan, but figuring about 30% is ideal. This way, you have a fighting chance at staying ahead of the depreciating value of your new car. (This applies to new and used cars- they're all going to depreciate. Always keep this in mind when buying a car.) Once you figure out the payment you can afford and the amount you can pull together for the down payment, you can go to your bank, or better yet, your credit union and get pre-approved for a loan. That way, you know how much car you can buy and the terms the bank will offer you. You also get the low-down before you fall in love with the shiny car on the lot. If the dealership can get you a better deal, go for it. This way, you have something to start with, and you're well-informed. One thing to note here- if you are one of the lucky single moms who lives off of child support and/or alimony, buying a car might be tricky. I can pretty much guarantee you will not be able to get a bank loan. The first requirement the banks look for is a job. Your best bet is to go to a smaller dealership that offers in-house financing, and bring your best down payment. 2. Unload Your Old CarLet's talk trade-ins. It helps if the car you're driving is paid off. A lot of dealerships will advertise that they'll pay off your trade-in no matter how much you owe. This kind of statement is slightly deceptive because they have to pay off your trade-in to free the title on the car and resell it. A little known fact about this is that if you owe more than the car is worth, that amount gets added to your new car loan when buying a car. It doesn't just go away. So- what this means is: if you're upside-down in your car now, and take out a new loan, you're even more upside-down by the time you drive off the lot.You will usually get more money out of your car by selling it yourself. If you can't work that out, or your car is particularly hard to sell, then try to trade it in. One advantage of trading in your old car is that the amount they pay you for your car will be deducted from the purchase price of the new car in the transaction. What does this really mean to you? This will reduce the amount you pay in sales tax for the new car. Either way you choose to sell your old car, figure out how much it's worth before you sell or trade-in. You can start by checking NADA or Kelly Blue Book online. Keep in mind, the retail price what the dealerships will sell it for- not quite what you would get for in on the street. Look for the trade-in price if you want to go that route. 3. Pick Your Car and Run With ItOK- what's next- run to the dealership? Wrong-o! The most important tool to carry when buying a car is information. Don't set foot on the lot until you know what you're looking for. Figure out what features you really need- passenger seating, gas mileage, 4 wheel drive, etc. Then combine that list with your target price and do some research online. Narrow your search to 3 cars that would work for you. It's not enough to know which cars you like. Know what the price should be. Generally, there is a mark-up of about $2000 on a new car. You can get a lower price than sticker, but they won't sell it to you for their cost. (They have to feed their kids, too) Used car mark-ups vary a lot more. It's important to know before you go.4. Stick to Your GunsNow you're ready to go to a dealership or private seller and start buying a car. You've done your research, you know what you want and what you can afford, so you're ready to wheel and deal. If you can time it right, you can increase your chances of getting the best price. Dealerships are more willing to deal at the end of the month, the end of the year, as well as in the fall when the next year's models usually come in. These are the times they are most motivated to hit their sales numbers.Don't let the sales people talk you into something else. Dealers will sometimes try to steer you to cars that have a higher mark-up, or a better rebate from the factory. You know what's best for you- stick to it. You're not a buying a car for the dealer's benefit. Test drive the cars you like, and keep your cool. You may be screaming with excitement inside, but keep the emotion at a minimum. If the salesman knows you're in love with the car, he knows he's got you where he wants you. If you're buying a used car, always ask if the car has been inspected, and if there is a warranty. This is pretty handy if you're not the mechanical type. If you're buying from a private seller, it's a good idea to have a mechanic or handy friend check the car over before you buy. Once you sit down to talk price, do not tell them your payment limit. They will always go up from there. Tell them what you want to pay for the car, and keep your eye on the price, not just the payment. Whatever you do, do not agree to a higher price or payment than the limits you have set. Also know that the first offer they make is not their best price. You've come prepared, so you're a force to be reckoned with. Be ready to walk away if they won't budge. Chances are, they'll call you back tomorrow and make a better offer. The most important thing to remember when buying a car is to bring your confidence, girl. If you do your homework before you shop, you have every reason to be confident. Don't play the “poor me, I'm a single mom” card. Be the strong woman you are, and others will respect you and deal with you accordingly.
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