Buying a new car has never been financially difficult. Edmunds’ analysis of 2025 found that 19.3% of consumers financed a new vehicle in the second quarter of 2025 committed to a monthly payment of $ 1,000 or more. It is one of the about five buyers who were once considered an extreme car payment – high interest rates and the prices of the growing vehicle.
Although it can be attracted by you to increase your budget for the car, locking yourself into a high -cost loan can be a painful mistake. Before signing, there are five common car-bursting misses to escape from here.
1. Buy out of your means
There is a difference between being able to buy something and being able to bear it wisely. With an average new vehicle transaction price of approximately $ 49,000, many buyers are actually raising their budget. It is not uncommon to see buyers extended Terms of financing 72 months or 84 months,
This shiny SUV may look within thanks to flexible financing, but can be quite a long -term hit for your financial health. Buying within your means-to target a loan period of more than 60 months and keep the expenses related to your car under 15% -20% of your monthly house payment-smart shopping in the era of interest rates and sometimes rising car prices.
2. Get a dealership loan
One of the most expensive and general mistakes, car buyers are waiting until they are sitting in the dealership Finance Office to think about the loan. Dealership may provide facility, but their financing may include the interest rate or hidden fees marked.
Instead, walk to the dealership with your bank, credit union or an online lender with a promoted loan proposal. According to the Consumer Financial Protection Bureau, this step can save buyers from hundreds of dollars in debt lives. When you do this, the dealer can still try to defeat the rate – and sometimes. But now you are interacting with the status of strength, not frustration.
3. Trading in a car with negative equity
If you are more and more outstanding on your current car, it is worth it – a condition known as a negative equity – trading it for a new vehicle can be a financial landmine. This usually occurs when people take a six -year loan, trade in a vehicle after only three or four years, and take the previous balance in a new vehicle. Rolling that deficit in a new loan worsens the problem, guaranteeing that you will be under water for more time.
According to Edmonds, in July 2025, 28.2% trade-in included negative equity, and the average amount above the vehicle price was $ 6,902. This determines the platform for a vicious cycle, especially if buyers often trade cars or face unexpected job loss or repair costs. If you are in this position, consider keeping your car longer or paying extra. If you can get a better rate, even the refinance can get you back.
4. Not working with the first internet sales team
Most of the major dealerships are now dedicated to internet sales teams which are available to you to sell cars quickly and often at better prices, which you get face to face. If you already know what you make, models and trim want, you can save hours – and hundreds or thousands of dollars – much more rather than working with Internet sales department.
Sites such as Edmund can help you compare pricing between many dealers, and many will show you real -time list, discounts and encouragement. It lets you shop comfortably and compete with dealers for your business. It also gives you a written quotation that you can bring with you – a powerful tool while interacting.
5. Car options used
Buying a new new is attractive – it is very smelling, it is under warranty, and no one else has touched it. But this is not always the smartest financial step. Today’s certified prior -owned vehicles often come up with an extended factory warranty, undergo rigorous inspections, and spend thousands less than their new counterparts. Rapid depreciation of most new vehicles only worsens the picture. According to Edmonds, 20% -30% of its value is lost in the first year. That depreciation can save thousands from avoiding hits.
Buying a new car is one of the biggest financial decisions that most people do – only to buy a house. Avoiding these five common mistakes will not just save you money-it has the ability to help ensure your long-term financial security. Take your time and do your homework. The right deal is not just about the car – it’s about the life you want to live because you take it far away.
,
This story was provided to Associated Press by the automotive website AdmondsJosh Jacquot is an contributor to Edmunds.
