Will car prices actually drop?

Yes, car prices are showing signs of dropping, especially for used cars, with wholesale values falling faster and new car inventory rising, suggesting a gradual decrease or stabilization in 2025 and into 2026, though they likely won't return to pre-pandemic levels soon due to factors like tariffs and inflation. Expect more discounts as dealers clear out 2026 models, with used EV prices offering strong value, but overall prices remain higher than before COVID.

Are car prices expected to drop?

Car prices aren't expected to plummet but are stabilizing, with analysts predicting a gradual easing in used cars as supply catches up and new car prices remaining elevated but stable, though interest rates are falling, easing monthly payments, while potential tariffs create uncertainty. Expect moderate drops in used markets and stable but still high new prices, with better incentives and more inventory in 2025-2026. 

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. 

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.

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. 

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What car can I afford making $3,000 a month?

Take-home pay is the amount you make each month after taxes, so if you bring home $3,000 monthly after taxes are deducted, it's likely you can comfortably afford a $300 car payment.

How much should I spend on a car if I make $100,000 a year?

With a $100,000 salary, you can generally afford a car worth $30,000 to $50,000, depending on your other finances, with total monthly car expenses (payment, insurance, gas, maintenance) ideally under $800-$1000 (10-20% of your net pay). A good guideline is keeping the total vehicle value under half your annual gross income, but prioritize conservative spending, a 20% down payment, and shorter loan terms for better financial health. 

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 is a $30,000 car loan for 60 months?

A $30,000 car loan for 60 months typically results in monthly payments ranging from about $500 to $600+, heavily depending on your interest rate (APR) and any down payment; for example, at 5% interest, it's around $566/month, while 7% could be closer to $600+, but lower rates or a larger down payment decrease this cost, say Edmunds, Calculator.net, and Honor Credit Union. 

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.
 

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 you never reveal to the dealer when negotiating?

If you tell them that you won't be taking out a car loan, many will either refuse to negotiate on the car's price or, worse, raise the price to increase their profit. If they know you have a specific budget, they also know they won't be able to move you up to a more expensive, profitable model.

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'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.
 

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.

What car brands will be cheaper in 2025?

Here are the 10 cheapest new cars of 2025.

• 2025 Nissan Versa: $18,330. ...
• 2025 Hyundai Venue: $21,550. ...
• 2025 Chevrolet Trax: $21,795. ...
• 2025 Kia Soul: $21,885. ...
• 2025 Nissan Sentra: $22,730. ...
• 2025 Kia K4: $23,165. ...
• 2025 Hyundai Elantra: $23,220 (tie) ...
• 2025 Nissan Kicks: $23,220 (tie)

What is a good APR for a 72 month car loan?

A good 72-month car interest rate depends on your credit, but generally, under 5% is excellent for new cars, while under 6-7% is great for used, with averages often falling between 4.5% and 8% for good credit, though rates vary significantly by lender and market conditions. Excellent credit (780+) could secure rates near the low 3-4% range, whereas average rates might sit around 5-7%, and poor credit could see rates well over 10%. 

What's a good down payment for a $60,000 car?

For a $60k car (likely new), aim for a 20% down payment ($12,000) to avoid being "underwater" (owing more than it's worth), but put down as much as you comfortably can, ideally 10-20% ($6k-$12k+), to lower your loan, monthly payment, and interest, while ensuring you don't deplete emergency funds. A larger down payment improves your financial position and can help secure better loan terms. 

Is it better to buy new or used with a loan?

It may be easier to secure a loan for a new car than it is for a used car, and new car loans often come with lower interest rates. Used cars can be a good fit if you're on a budget and they generally cost less to insure; however, interest rates for used car loans are often higher than for new car loans.

What does Gen Z call a car?

Gen Z slang for a car often uses "whip," meaning a cool or nice car, but they also give them personal nicknames like "Baby," "Babe," "Beast," or "Rocket," with terms like "banger" for a great car or "ride" also common, while traditional slang like "clunker" still pops up for older ones. 

Why do people say not to buy a new car?

Depreciation

As they say, a vehicle's value depreciates as soon as you drive it off the lot. For new cars, depreciation is a more significant concern because, on average, new cars lose up to 30% of their value in the first two years. Ultimately, depreciation is one of the cons of buying a new car to be aware of.

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

On a $50k salary, you can likely afford a car in the $17,000 to $35,000 range, but it depends heavily on your budget; aim for monthly payments under 10-15% of your take-home pay, with total car expenses (payment, gas, insurance, maintenance) under 20%. A total car price around half your annual income ($25k) is a conservative guideline, while some suggest aiming for a purchase price of $17,500 (35% of gross income) for a cheaper car. 

What hidden car costs should I consider?

Beyond the monthly payment, you'll also face years of variable expenses like car insurance, gas, maintenance and taxes, which can spike without warning. By considering these costs before buying a new or used car, you'll be better prepared for the financial ups and downs of hidden car ownership costs.

What is a good APR for a car loan?

A good car loan APR depends on your credit, but generally, below 7% is excellent for new cars with strong credit, while rates can range from 5-8% for good credit and higher (10%+) for fair/poor credit, with used cars often having higher rates than new. Key factors are your credit score, the loan term, and whether the car is new or used, with top rates (under 4%) usually reserved for super-prime borrowers.