Buying a Car? 10 Signs You Should Walk Away

When you're standing on a car dealership lot, it can be tough to decide whether the vehicle in front of you is worth years of monthly payments.

Knowing key deal-breakers can help you avoid wasting money on a car you'll regret. Following are a few indicators that it is time to look for another option when purchasing a car.

1. It has a branded title

You can check the title before buying a used car at the National Motor Vehicle Title Information System website.

If the title is branded, that is a warning sign that something isn’t typical about the car. It often means the car has experienced significant damage and has been rebuilt.

A branded title can also indicate that the odometer was rolled back, which means the car's mileage may not be accurate.

The key is to find out what’s wrong and then decide whether the car is a good investment.

2. It's far outside of your budget

It’s always wise to calculate how much you can afford for your monthly car payment before you arrive at the dealership.

You don’t want the savvy salesperson to convince you to take on a much larger loan than you can truly afford. Any payment that is far outside of your expected budget is a deal breaker.

Pro tip: One way to lower your auto-related costs is to find a great car insurance policy . Shop around and compare quotes to make sure you get the right policy at the best price.

3. Rust seems to be everywhere

Rust is an indicator of significant wear and tear on the car. Sometimes rust on the body is a warning sign that there's also rust on the car’s frame, where you can’t see it very well.

If you plan to buy a car with rust damage, have your mechanic check it out and indicate to you how much money and work it will take to restore it. In many cases, walking away from the deal is your best bet.

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4. There's a leak under it

A good car dealership will ensure a vehicle isn’t leaking fluid before putting it on the lot. But other dealerships aren’t as diligent.

A leak typically means repairs are needed. Oil or transmission fluid leaks indicate a car that needs maintenance and upkeep.

Sure, you can repair these issues, but that is more money out of your pocket. And a leak that hasn’t been addressed should make you nervous about potential problems with other parts of the car.

5. You hear a strange sound

On a test drive, listen for unusual noises. If you hear a knocking sound, a squeal when you turn, or a bit of stuttering when turning the vehicle on, it’s a red flag.

Knocking sounds in particular could mean a concern with the engine, which might cost thousands to fix. And be especially concerned if the salesperson tries to blow off the noise or doesn’t take it as seriously as you do.

6. The interest rate is too high

An interest rate that is too high can result in an auto loan payment that busts your budget.

Drivers with the best credit scores are likely to get the lowest interest rates on car loans. If your credit is bruised, work on healing it by always making on-time payments on your credit cards and any other types of loans you might have. Over time, this should help raise your credit score.

Once your score has improved, you should qualify for better rates. If you can't wait that long, check with multiple banks, credit unions and other lenders to see if you can get a loan with a better rate.

7. You can’t get the trim package you want

When buying a new car, you expect to pick out the features and specs, even down to the color. Sometimes, dealerships cannot offer access to the trim package you want or may not have a model with the safety features you desire.

Don’t settle. If the features are important to you, keep looking until you find the car you truly want.

8. There’s a musty smell or a fragrant one

As you sit down behind the wheel, take a deep breath. If you smell mildew or a musty smell, that could indicate the vehicle has some type of water damage.

Water damage can be difficult to pinpoint, leading to electrical issues over time. If the dealership is selling a car loaded with deodorizers or fragrances, that’s a worrisome sign. What are they trying to cover up?

9. The vehicle report shows a history of accidents

A used car’s vehicle history report can provide insights into what has happened to the vehicle in the past. If the report reveals a history of accidents, that might be a deal breaker.

It’s difficult to restore a car to good condition after a serious accident — or after several wrecks. Why put the safety of your family at risk?

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10. Your mechanic says the problem is major

It’s often a deal breaker when your mechanic spots a significant problem with the vehicle, like a transmission issue. Even if your mechanic suggests the issue is fixable, you might not want to go down this road.

Not only is the repair likely to be costly, but the damage may be more significant than first appeared.

If you don’t want to have to repair your new-to-you car, avoid buying a used car with a major problem.

Bottom line

Buying a new or used car can be a wise and necessary investment. And with so many vehicles on the market, you don’t have to settle for something below your standards.

Do your research before choosing a car and make some smart car owner moves to increase your odds of getting a good deal that will leave you with reliable transportation for years to come.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).