Will car prices go down?

Car prices aren't expected to plummet, but new models are stabilizing, and some used segments are seeing slight dips, with potential relief from falling interest rates in 2026, though elevated costs and tariffs keep overall prices high, so expect gradual shifts, not dramatic drops. Expect continued high prices but more incentives and better loan terms, making things slightly more affordable, especially if interest rates fall as predicted.

Are car prices expected to decline?

While it isn't necessarily a good time to buy a new or used car due to high prices, decreasing interest rates are starting to offer some payment relief. Moving into 2026, car prices are expected to remain stable without significant decreases, so putting off a purchase may not provide much cost benefit.

Should I wait to buy a car 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. 

Will cars get cheaper in 2025?

Car prices in 2025 are showing signs of moderate easing, with increased new car inventory leading to more incentives and gradual price dips, especially for certain used models like sedans and EVs, but overall prices remain higher than pre-pandemic, with analysts expecting a leveling off rather than a sharp plunge, though rising material costs and potential tariffs could keep prices elevated. 

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). 

Car Prices in 2026: The Truth No One’s Telling You!

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.

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'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 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 not to say to a car salesman?

To avoid giving a car salesman leverage, don't say you need a car, "I love this car," or mention your low credit score; instead, focus negotiations on the total price (not monthly payments), keep your trade-in value secret (get a third-party appraisal), and don't reveal you're paying with cash, as dealers want to make money on financing. Be polite but firm, and act like you're ready to walk away to get the best deal. 

What is the 3000 rule for cars?

Use the 7.6-year benchmark, a $3,000 repair limit, and 150,000 miles to decide—keep a solid car to 10–12 years, or trade before big failures land.

Which is the best month to buy a car?

The best months to buy a car are generally October, November, and especially December, due to end-of-year sales goals, new model year arrivals pushing old stock, and holiday incentives like Black Friday, giving you maximum leverage for discounts and 0% financing, with late-month days offering the best deals. Alternatively, shopping in January/February is great for used cars as dealers clear trade-ins from holiday purchases, while quarter-ends (March, June, Sept, Dec) also offer strong sales incentives for hitting targets. 

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 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. 

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 is a $70,000 car payment for 72 months?

For a $70,000 car loan over 72 months, your monthly payment will vary significantly with interest rates, but expect payments generally ranging from around $1,000 to over $1,200+ per month, depending heavily on your APR (Annual Percentage Rate) and down payment, with lower interest rates leading to lower payments. For example, at a 4.59% APR (a common rate for 61-72 months), payments would be roughly $1,130, but a higher rate (like 7%) could push payments towards $1,250+. 

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. 

When should you not buy a car?

Worst Times

Warmer weather and tax refunds bring buyers out in droves. With so much demand, dealers are far less likely to be in the mood to lower their prices. Plus they still have several months before the new models flood the lots. At the beginning of a new model year (assuming you want next year's model).

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

The 20/3/8 rule is a car-buying guideline from The Money Guy Show, suggesting you put 20% down, finance for no more than 3 years, and keep total monthly car expenses (payment + insurance + gas) to under 8% of your gross income to maintain financial health. This strategy helps you avoid overspending, depreciation, and getting "upside-down" on your loan, ensuring your vehicle supports your budget rather than burdens it.
 

What is the slowest day for car dealerships?

To get the best deal and personalized service, consider visiting the dealership on a weekday, preferably midweek. Tuesdays and Wednesdays are particularly good days to shop because the dealership is typically quieter, and salespeople may be more willing to negotiate to make a sale.

What is the four square trick at a car dealership?

The “4-Square” Tactic

One of the most common sales tactics used by dealerships is the 4-square worksheet. This worksheet is divided into four sections: purchase price, trade-in value, down payment, and monthly payments.

What not to tell the dealer when buying a car?

"I Don't Know What My Credit Score Is"

No matter if you know your score or not, buyers with low credit scores will be offered higher interest loan rates than buyers with good credit. If you rely on the dealer to tell you what you qualify for, you may get a higher interest rate than your credit score merits.

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.