Are used-car values still high?

Yes, used car values are still elevated compared to pre-pandemic levels, though they've cooled from their 2022 peak, with newer, desirable used cars remaining especially pricey, but the market shows signs of a buyer's market with increased inventory and slight price drops in some segments. While older, budget-friendly cars (under $15k) are still hard to find, higher-end used vehicles, including luxury and EVs, might offer better value as they depreciate faster, and new car deals with 0% financing sometimes make them a better buy than a used one.

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.

Is it better to buy a car now or in 2025?

For most, the best time to buy a new car is during year-end sales from Late November through December 2025. Waiting until 2026 likely means higher prices. Federal tax credits for both new and used EVs expire on September 30, 2025, making this the final window to capture thousands in savings.

What's the worst month for car sales?

The slowest months for car sales are typically January and February, following the busy December holiday season, as consumers recover financially and face cold winter weather, leading to lower demand and fewer shoppers, though this also creates great deals on leftover new models and used cars for savvy buyers. August and summer months can also see dips due to vacations, but winter (Jan/Feb) is consistently cited as the slowest period for overall sales volume.
 

Why are used cars losing value?

Wholesale values are determined by demand, and when demand drops, so do prices. Another factor contributing to declining used car values is an increase in new car inventory. When more cars are available on the market, it's harder for buyers to find a good deal or an excellent vehicle.

How High Are Used Car Values Going?

What is Dave Ramsey's rule on cars?

Dave Ramsey's core car rules emphasize paying cash, buying used, and limiting total vehicle value to half your annual income, avoiding new cars unless you're a millionaire due to rapid depreciation. He stresses buying reliable, older used cars, getting them inspected by a mechanic, and never taking on debt for depreciating assets like cars, trucks, or RVs, focusing on financial freedom over looking wealthy. 

Will used car prices continue to drop in 2025?

Yes, used car prices have been gradually dropping throughout 2025 as the market stabilizes from pandemic highs, with modest decreases in everyday cars and SUVs, though trucks and luxury models remain steadier; expect continued moderation rather than a sharp crash, with better inventory and negotiation opportunities as the year ends, but prices are unlikely to return to pre-2020 levels due to lingering inflation and fewer off-lease models entering the market. 

What are three things to never tell a car salesperson?

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 the 20/4-10 rule for buying a car?

The 20/4/10 rule is a car buying guideline suggesting you make a 20% down payment, finance the car for 4 years (48 months) or less, and keep your total monthly transportation costs (payment, insurance, gas, maintenance) at or below 10% of your gross monthly income, helping prevent debt and staying within budget. It's a framework to avoid being "upside down" on a loan and overspending on a vehicle.
 

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 ...

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 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. 

Which car flips over the most?

High Center of Gravity

Vehicles that sit higher off the ground like SUVs, pickup trucks, and vans are more likely to roll over. Light trucks have a much higher rollover rate than sedans. Adding passengers or heavy cargo raises the center of gravity even more.

What is a red flag when buying a car?

Use your best judgment; if a car looks or feels wrong, don't buy it. Look out for excessive rust, a worn tailpipe, or illuminated dash lights. During your test drive, pay special attention to how the car handles and sounds. If something's off, ask the seller and double-check the title and history report.

How much would a $70,000 car payment be?

A $70,000 car payment varies significantly but expect roughly $900 to $1,300+ monthly for a loan, depending on term (60-72 months common) and interest rate (e.g., 6-9% APR), or $700-$1,200+ for a lease, factoring in down payments, miles, and money factor, with total auto costs (payment, gas, insurance) potentially reaching $1,000-$1,500+ monthly for a comfortable budget. 

What is the 6000 car rule?

The Section 179 tax deduction gives vehicles under 6,000 pounds that are used for business purposes a deduction cap of $12,400 and $30,500 for vehicles over 6,000 but under 14,000 pounds.

What is Dave Ramsey's rule on car buying?

Dave Ramsey's core car buying rule is to pay cash for a reliable used car, avoiding car loans entirely because cars lose value, and ensuring the total value of all your vehicles doesn't exceed half your annual income, emphasizing that things that depreciate shouldn't be financed. He advocates buying what you can afford outright to prevent debt, suggesting you save up and buy a modest, dependable vehicle instead of a new car that rapidly loses value.
 

What car can I afford making $50,000 a year?

With a $50k salary, you can likely afford a reliable car in the $15,000 to $25,000 range, especially if you follow the rule of keeping your total monthly car expenses (payment, insurance, gas, maintenance) under 10-20% of your take-home pay, aiming for payments around $300-$400/month after a good down payment, and focusing on affordable models like a used Toyota or Hyundai for long-term savings. 

How to not get screwed by a car dealership?

Make sure that the Total Cash Price on the written contract matches the price that you were told. If the prices are different, you may be the victim of fraud. If the dealership refuses to honor the representations made to you by the salesperson, refuse to sign the contract and walk away from the dealership.

What are car salesman tricks?

Car salespeople use tactics like focusing on low monthly payments instead of the total price, creating artificial urgency, using the "four-square" worksheet to confuse numbers, lowballing trade-ins, adding hidden fees and extras (like extended warranties), and wearing you down with delays and "good cop/bad cop" routines to pressure you into a bad deal. Key strategies involve emotional manipulation, obscuring the real cost, and making you feel obligated to buy. 

Why do car salesmen always talk to their manager?

The ploy, “Let me go talk to my manager" is called a T O or a turn over. Most dealerships require that a salesperson do a T O before letting the customer leave, in other words, if they cant close the deal then they turn it over and let someone else try.

What is the best used car to buy in 2025?

For the best used cars in 2025, focus on reliable, fuel-efficient models like the Toyota Corolla/Camry/RAV4, Honda Civic/CR-V, Mazda CX-5/6, and Lexus ES/NX, noted for their longevity and strong resale, with popular choices also including the Toyota Tacoma for trucks and the feature-packed Hyundai Ioniq 6 for EVs, always prioritizing low mileage and good maintenance records for best value. 

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 month are used cars cheapest?

The cheapest months to buy a used car are typically the winter months (January & February) and the end of the calendar year (October-December), driven by dealer quotas, slow foot traffic after holidays, and clearing out older inventory for new models, with late December and early January often offering the best pressure for deals. You can also find deals during the late summer (August/September) as new models arrive, increasing trade-ins, or around tax refund season (Feb-April).