When Buying a Car after Divorce

    Even if you made out well financially as a result of a generous divorce settlement, you probably don’t want to overpay for a new car. Shopping for a new vehicle can be an intimidating and time consuming endeavor, especially if you’re a newly single woman who is confronted with a fast-talking, male chauvinist salesperson. Regardless of how much you actually know about cars, the Internet is a powerful tool that can help prevent you from spending too much on your new car purchase.

With a few clicks of the mouse, you can determine how much other people in your geographic area have recently paid for the car (and vehicle configuration) you’re planning to purchase, plus you can get a good idea of how much your dealership actually paid for the car (and how much profit they’re hoping to make off of you). The following tips can help you save money when shopping for a new car: Define your needs, and balance them with your wants.

First, focus on your budget.
The average person should not spend more than 20 percent of their gross monthly income on car-related expenses (including their car payment, insurance, gas, parking and vehicle maintenance combined.) Next, evaluate your driving habits and needs. This will determine the category of vehicle you’ll want to purchase, whether it’s a compact car, two-door coupe, standard sedan, an SUV or a pickup truck, for example. Will the vehicle be used mainly to commute alone to and from work, for trekking long distances in poor weather conditions, or will be you transporting young kids around town? Consider how important fuel economy, passenger space and stowage capacity is to you. Only after you’ve defined your needs should you consider your wants, including what optional accessories you’d like to add to the new vehicle to customize the driving experience.

Before you start car shopping, determine your credit score.
This will directly impact how much of a car loan you can qualify for. You’ll also need to determine the approximate value of your trade-in, plus calculate how much of a down payment you’ll be able to make. Shop around for the best new car financing rates and deals. New car dealerships won’t always offer the best financing deals. Check with your local bank or credit union, plus shop online for financing opportunities from websites like Bankrate.com or LowerMyBills.com. 

Evaluate the manufacturer’s suggested retail price (msrp), which is the price of the vehicle set by the manufacturer.
This, however, is not typically the price people pay for the vehicle after they’ve negotiated and taken advantage of rebates. You’ll also want to compare the invoice price / dealer sticker price (how much the manufacturer charges the dealership), base price (the suggested retail price of the vehicle with all standard equipment and factory warrantee, without accessories and options), and Monroney sticker price (the price displayed on the vehicle’s window by law, which includes the base price of the vehicle, plus all options and accessories that have been added to the specific vehicle you’re looking at).

While negotiating the lowest possible purchase price for a new vehicle is important, pay careful attention to what your monthly payment will be if you’ll be financing the vehicle. Be sure to consider vehicle excise taxes, gas, parking, maintenance and insurance in order to determine if you can actually afford the monthly car payment being proposed. When you begin working with a new car salesperson, never initially discuss how much you can afford, or your trade-in’s value, or the dealer’s financing rates until after you’ve negotiated your best price for the new vehicle you’re interested in. Only then should you embark on a separate negotiate to get the most money possible for your trade in, and/or the lowest interest rate for your financing deal.
 
Instead of purchasing a brand new vehicle, consider a “Factory Certified Used Car.” This can save you thousands, plus allow you to purchase a more expensive vehicle than you could otherwise afford. A Factory Certified Used Car has been refurbished to a “like new” condition and can be purchased only from an authorized dealer. It comes with a warrantee that’s equivalent or better than what’s offered with a new vehicle. “When buying a new vehicle, you need to know exactly what people are actually paying in the marketplace.