The Complete Guide to Buying a New Car as a Solo Woman
The world continues to evolve in many ways. However, when it comes to buying a new car, it often feels like stepping into a time machine—especially if you’re a solo woman.
Data shows that women buy 62% of new cars in the United States and influence 85% of all car purchases. Yet many car dealers are still ripe to take advantage of female shoppers, at least according to the numbers. In fact, one Yale study has repeatedly found that car dealers offer higher list prices to women than men, by about $200 on average.
Indeed, there are likely many reasons for this discrepancy. Still, one way to ensure you get the best deal when buying a new car is to prepare accordingly before signing the papers.
Luckily, my husband Rob handles all car purchases in our household. Because even though I’m financially savvy, I know what I don’t know when it comes to cars. However, I remember many frustrating experiences buying a new car as a solo woman. I hope this article helps the next time you’re in the market for a new vehicle.
Tip #1: Do Your Homework
Kelley Blue Book reports that women are twice as likely as men to be undecided on new vehicle type. Unfortunately, walking into a car dealership with no plan in place leaves you open to potentially unsavory sales tactics.
To avoid making a purchase that you may not be happy with in the long run, be sure to do your research ahead of time. Websites like Edmunds.com, Kelley Blue Book, and Car and Driver provide in-depth information on pricing, safety, and other features. You can also read reviews to understand how certain cars measure up against others.
In addition, visit the dealership’s website ahead of time to familiarize yourself with what they have in stock and the respective sticker prices. That way if the dealer directs you to the most expensive version of a particular vehicle, you know if there are more affordable versions available.
Lastly, once you know which cars you’re interested in, go directly to the corporate website—for example, Acura.com or Ford.com—to see what deals they’re currently offering. Many times, brands will offer incentives that can reduce your final price significantly.
These steps may seem tedious, and it may not excite you to research cars online. However, the more information you have ahead of time, the better deal you’re likely to receive when buying a new car as a solo woman.
Tip #2: Know What You Can and Can’t Negotiate
Depending on the market environment, you may have limited room to negotiate the final price of your vehicle. Even so, it’s helpful to know what you can negotiate when buying a car as a solo woman, as well as what’s set in stone.
First, know that the MSRP—the Manufacturer’s Suggested Retail Price—is just that: a suggestion. As independent franchises, car dealers have the latitude to sell the cars on their lot for any price they choose. In other words, the MSRP should be the starting point for your negotiations.
To better understand your ability to haggle the MSRP, you should also know the dealer’s invoice price and the car’s market value. The invoice price is how much the dealer paid the manufacturer for that vehicle. While you can ask the sales manager for the invoice price, websites like Consumer Reports may provide more straightforward information. In addition, Edmunds.com and KBB.com can show you what other people in your area have paid for similar cars recently to help you determine the fair market value.
So, what can’t you negotiate? Taxes and registration fees are non-negotiable when buying a new car. In addition, dealers won’t negotiate the cost of transporting the vehicle from the factory to the dealership. But beware of dealers attempting to add a second freight charge to the final price of the vehicle. This fee should be negotiated down or eliminated—and may be a sign that you don’t want to do business with that dealership.
Finally, keep in mind that some dealers are moving towards “no-haggle” pricing, especially if you’re looking at a used or certified pre-owned car. If this is the case, typically your only room for negotiation is on your trade-in value, financing terms, and the price of any add-ons.
Tip #3: Know What Your Trade-In Is Worth
If you plan to trade in your current vehicle when buying a new one, doing your research ahead of time is essential. Many dealers will assume you don’t know what your vehicle is worth and intentionally try to low-ball you on price. They may also try to tell you your car is in worse condition than it is.
When buying a car as a solo woman, don’t begin any negotiations until you know what your trade-in is worth. A good place to start is KBB’s “My Car’s Value” tool. Simply enter your VIN or make and model and answer a few questions about features and overall condition. KBB will then quote you a private sale price, trade-in price, and instant cash offer. Typically, the price you can realistically get for your trade-in falls somewhere between the trade-in price and instant cash offer (assuming the information you enter is accurate).
However, in certain cases you can get a better offer for your car than the Kelley Blue Book value. Therefore, it’s also helpful to check online dealers like Carvana and CarMax. Carvana gives you what they call a “real offer” for your car in less than two minutes. CarMax will also give you an instant offer online.
These three resources will give you a pretty good idea of what you can reasonably get for your trade-in. Once you have a quote from each, be sure to take screenshots or print them out so you can show the dealer what others are offering for your vehicle if necessary.
Tip #4: Understand Your Financing Costs
Unless you plan to pay in cash, you’ll likely need to finance the cost of your new vehicle. Unfortunately, the financing discussion can be one of the most confusing aspects of buying a new car as a solo woman if you don’t prepare ahead of time.
One of the best ways to prepare is to know your current credit score. Most credit bureaus and credit card companies let you check your primary FICO® Score for free. You also have a separate FICO® Auto Score, which dealers use to determine your creditworthiness.
If your overall credit score is strong and you’ve diligently paid your car notes in the past, your Auto Score is probably fine. However, if you’re nervous, you should also check this score before buying a new car.
Once you know your credit score, you’ll have a better idea of the interest rate you can expect on your car loan. If your credit score is strong (typically above 700), you’re likely to qualify for any dealer financing promotions. In many cases, the promotional rate is more attractive than what you’ll pay for a third-party auto loan.
On the other hand, if the dealer isn’t offering any financing incentives, you may want to research your bank or financial institution’s auto loan terms and see if you qualify. Having this information ahead of time will better prepare you to negotiate with the dealer and avoid overpaying for your new car.
Tip #5: Avoid Common Negotiation Pitfalls
When buying a car as a solo woman, the sad truth is that the dealer will try to take advantage of any knowledge gaps. For example, when negotiating price, they’ll likely ask you what you want your monthly payment to be.
Don’t share this number with them! Only negotiate the final price of the vehicle. You can also try to improve your financing terms, but only do this once you’re satisfied with the final price of the car.
It’s fine—and even advisable—to determine what your budget is ahead of time. However, sharing this number with the dealer allows them to manipulate the other terms of the transaction in their favor while still meeting the upper end of your monthly budget. For instance, they may quote you a higher price but stretch your loan term out six or seven years to lower the monthly payment.
Alternatively, they may try to push you into a lease by offering you a lower monthly payment. And while in some cases a lease may make sense for your budget and lifestyle, you should only lease a car if this is your intention. Otherwise, you’re locking yourself into a contract and have no asset to sell if your plans or financial circumstances change.
Secondly, the dealer will likely try to sell you gap insurance and a pre-paid maintenance plan. You don’t need to buy either of these, no matter what they tell you!
Instead, check with your insurance company to see if your auto insurance includes gap coverage. If not, you can likely add it at a very low cost.
Additionally, a pre-paid maintenance plan may make sense in certain cases. But trying to do the math on the spot is nearly impossible. Bottom line: don’t let the dealer pressure you into something you’re not sure about.
Tip #6: Be Ready to Walk Away When Buying a New Car as a Solo Woman
Of course, the first rule of any negotiation is to be ready to walk away. If you’re not completely happy with the terms of the transaction or the vehicle, don’t sign the papers. In many cases, taking a break from the negotiation gives you more leverage to ask for what you really want. It also gives you more time to research your options in the meantime.
Buying a car as a solo woman can be a stressful and frustrating experience. Yet the more information you arm yourself with ahead of time, the more empowered you’ll be to buy it on your terms.
Curtis Financial Planning specializes in helping independent women thrive today and plan for tomorrow. If we can help you take control of your personal finances, please get in touch.