Are higher car prices here to stay?

Yes, experts predict higher car prices are largely here to stay, with new car prices likely staying near or above the $50,000 average and used car prices remaining elevated due to factors like inflation, EV costs, supply chain issues, and consumer preference for larger vehicles, with little significant drop expected soon. While a market moderation is occurring, a return to pre-pandemic price levels is unlikely in the near future.

Is it better to buy a car now or wait until 2025?

You should buy a car now (late 2025) for deals on outgoing 2025 models, leveraging year-end incentives and better inventory, or wait until late 2025/early 2026 for aggressive 2026 model-year clearance, but be aware of potential 2026 model year price hikes and expiring EV tax credits by Sept 2025, making late 2025 a sweet spot. Waiting longer risks higher prices and potentially rising interest rates, though new inventory levels are improving. 

Are car prices predicted to go down?

Car prices aren't expected to plummet, but may stabilize or see slight dips in specific areas as new models arrive, though overall prices remain elevated due to inflation, tariffs, and consumer demand for tech-heavy vehicles; expect higher prices but potentially better loan rates and more incentives as 2026 progresses, making late-year deals possible for new cars, while used prices remain strong due to new car affordability issues. 

What is the 8% rule when buying a car?

The 20/3/8 rule is a guideline that suggests you put 20% down on a car and repay the loan over three years. Applying the rule correctly will also require your monthly payment and car expenses be 8% or less of your income.

Are new car prices expected to drop in 2025?

Experts predict a shift in the car market in 2025. While prices haven't plummeted, a downward trend is emerging, particularly for new cars. This is welcome news after a period of significant price increases. However, the picture is complex, with factors affecting new, used, and 2025 electric car prices differently.

CRAZY Reason Why Higher Car Prices Here to Stay!

What is the cheapest month to buy a new car?

The cheapest months to buy a new car are typically October, November, and especially December, due to year-end model clearances and salespeople/dealerships racing to meet annual quotas, with great deals also found at the end of the first quarter (March/June) and during holiday weekends like Memorial Day. Waiting until the final days of the year offers the most significant discounts as dealers clear out outgoing model years (e.g., 2025s to make way for 2026s). 

How much commission does a car salesman make on a $30,000 car?

It is just a way for the dealer to ensure he's making money by reducing the sales commission. If the invoice cost of a vehicle, for example, is $30,000, then the normal 5-percent profit would be $1,500 and the 25-percent sales commission on the sale would be $375.

What should a $30,000 car payment be?

For a $30,000 car, your monthly payment could range from around $500 to over $700, depending heavily on your down payment, loan term (e.g., 60 vs. 48 months), and interest rate (APR), with longer terms and higher rates increasing payments, while a larger down payment (like 20%) lowers them significantly. For example, with a $3k down payment, 5.8% rate, and 60 months, it's about $520; with a good rate on a 4-year loan, it could be $733. 

What not to say to a dealership when buying a car?

Let's look at some things to keep under your hat while you explore the lot.

• "I Don't Know Much About Cars"
• "My Current Car Is on Its Last Legs"
• "My Lease Is Almost Up"
• "I'm Going to Pay Cash!"
• "I Already Have a Car Loan Lined Up"
• "I Love This Car"
• "I've Never Bought a New Car Before"

What is Dave Ramsey's rule on car buying?

Dave Ramsey's core car-buying rule is to buy used, pay cash, and keep total vehicle value under half your annual income, avoiding new cars unless you're a millionaire, as they depreciate rapidly. He emphasizes avoiding debt, focusing on reliable used cars (not necessarily junkers), and using the 20/4/10 rule for loans20/4/10 rule for loans if financing, but cash is king.
 

What's the worst month for car sales?

Generally, January is the slowest month for car sales due to post-holiday spending, cold weather, and consumers waiting for tax refunds, with February also being slow as winter continues and people recover financially. While December is busy with holiday deals, the lull in January and early February follows, with sales picking up as tax season brings more buyers in March/April, notes sources like Cox Automotive, Carketa, and ecarstrade.com.
 

How much should I spend on a car if I make $60,000?

On a $60,000 salary, you can generally afford a car in the $20,000 to $30,000 range, with total monthly car expenses (payment, insurance, gas, maintenance) ideally staying under 15-20% of your take-home pay, which might be around $300-$450 for just the payment, though some say up to 35% of gross income for the total vehicle price. Key factors are your credit score, down payment (aim for 20% to avoid PMI and reduce interest), loan term (shorter is better), and other debts. 

How much will dealers come down on a new car?

Unfortunately, it isn't an exact science because it changes from car to car and dealer to dealer. However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb.

Why Dave Ramsey says not to finance a car?

“Cars, trucks, RVs, boats, and everything that has motors and wheels go down in value,” Ramsey wrote recently. “NEVER finance them, because they go down in value and you get stuck in them. Don't let debt trap you in something that's losing value every day. Save up, pay cash, and own it outright.”

What is the red flag rule for car dealers?

The Red Flags Rule (the Rule), enforced by the Federal Trade Commission (FTC), requires automobile dealers to develop and implement a written identity theft prevention program designed to identify, detect, and respond to warning signs—known as “red flags”—that indicate that a customer or potential customer could be ...

What credit score is needed for a $30,000 car?

To qualify for a $30,000 car loan, most lenders prefer to see a credit score of at least 660 to 700. That being said, your credit score is only one part of the equation. Lenders will also consider: Your debt-to-income ratio (how much you owe compared to how much you earn)

What is a red flag in a car dealership?

From rolled-back odometers to suspicious pricing that seems too good to be true, there are clear red flags that every shopper should be aware of before signing on the dotted line. In this guide, we'll break down 10 of the biggest warning signs to watch for when visiting a used car dealership in 2025.

What is the 20 3 8 rule for buying a car?

The 20/3/8 car buying rule is a guideline for affordable vehicle purchases, suggesting you should make a 20% down payment, finance the car for 3 years or less, and keep the total monthly car expenses (payment, insurance, gas) to 8% or less of your gross monthly income to avoid overspending and stay on track with financial goals, according to financial advisors from Money Guy and Chase https://www.chase.com/personal/auto/education/buying/what-is-the-20-3-8-car-buying-rule, Money Guy.
 

How much is the monthly payment on a $70,000 car loan?

A $70k car payment varies significantly but expect roughly $800 - $1,200+ monthly for a loan (60-72 mos, 7-10% APR, decent down payment) or $700 - $1,200+ for a lease, depending heavily on your credit, down payment, loan term (length), and the specific interest/money factor. A larger down payment and shorter term lower the monthly cost, while a low credit score or long term raises it. 

Is a 60 or 72-month car loan better?

Better interest rate: A 60-month loan will typically have a lower interest rate than a 72-month loan because the risk for lenders isn't as high. (Lenders consider long-term loans to be riskier because the longer it takes to pay off the loan, the more opportunity exists for the loan to not be paid back in full.)

What is the rule of 20 4 10?

The 20/4/10 rule is a car financing guideline suggesting you make a 20% down payment, finance the car for no more than 4 years (48 months), and keep your total monthly vehicle expenses (payment, insurance, gas, maintenance) to under 10% of your gross monthly income, helping you avoid overspending and staying out of "underwater" car loan situations. 

How much profit does a dealer make on a new car?

According to the National Automobile Dealers Association (NADA) as of 2022, the average gross profit for a used car is $2,337. That same data set puts the average gross profit for new cars at $1,959.2 Breaking out the data between independent dealers and franchise dealers, there is a wider gap.

Do car salesmen make hourly or just commission?

California car salesmen classified as non-exempt employees are not entitled to an hourly wage. Most are paid on a commission basis or on a “piece rate,” though some also earn an hourly wage in addition to their commission earnings.

Do car salesmen make more on new or used cars?

Used car sales: almost always a money maker

Dealerships will gladly sell you a new car, but it's used vehicles where they often make the most money. Consider where a dealership gets its used-car inventory: either from trade-ins or at a wholesale auction.