12 Things to Consider Before Buying a New Car

When purchasing a new car, figure out your budget, ownership expenses, lease vs. purchase, depreciation, and timing – all can either save or cost thousands. At $48,000, on average, for a new car in the US, it’s one of the more important financial choices you will make in your life. Besides the sticker price, fuel, insurance, maintenance, and depreciation will all soon start to tally up – doing the maths before putting pen to paper is essential.

Key takeaways:

Take control of your money, optimize your spending and grow your savings automatically

• Info is king: Never step foot on a lot without knowing the invoice price.
• Total cost is important: Not just your monthly loan, but consider insurance, fuel, and maintenance.
• Time: Shop out of season and end-of-month for optimal leverage.

Is Buying a New Car Worth It?

This is an opinion that is only relevant to your personal financial situation and driving behavior. The advantages and disadvantages are clearly different:

• Pros: You receive the most up-to-date safety technology, a manufacturer’s warranty, and the added assurance that would come from a “zero-mile” history. Loans for new cars are also often cheaper than for used cars.
• Cons: The main drawback is a depreciation where you lose thousands in value at an instant. The registration fees and insurance costs for new vehicles are also much higher.

A new car’s warranty is priceless for those who drive more than 20,000 miles annually and are looking for maximum peace of mind. If the goal is to save money, however, a 2-3 year old certified pre-owned (CPO) vehicle will typically strike the sweet spot between keeping up with new technologies and preserving value.

1. Do You Actually Need a Car?

Recent data indicates that although car ownership is high, the advent of remote working and micro mobility has changed their requirements. Ask yourself before buying if you need or want it. Some people purchase them for prestige, while others require daily use. If your city is on a level with infrastructure, you may even be tempted to consider the car-free lifestyle, saving thousands of dollars a year. 

2. Should You Lease or Buy?

A lot of people are skeptical about leasing. Leasing a vehicle can seem cheaper monthly, but you don’t build ownership and may face additional fees. For a full breakdown of the financial differences, see our guide on leasing vs buying a car. You will still need to make payments, and there are costs like fees, taxes, fuel, and maintenance. Lease terms also vary by dealership.

If you choose to buy, following the 20/4/10 rule for buying a car can help you stay within a safe financial margin.

3. Can You Afford a New Car?

Never purchase a car without being able to make a down payment. Use an auto loan calculator to see how much each is going to cost you monthly, the interest charged, and how it will affect your budget before you make your final decision. Keep in mind that it will have additional expenses. So, cover the cost of the vehicle, purchase gas, cover insurance and save up for:

1. The amount of fuel it consumes
2. Will you be able to maintain it?
3. Can you handle a breakdown?

4. What Does Car Ownership Really Cost?

Ownership costs have changed significantly in recent years.

Today:

• Average annual cost: $11,577 (AAA Your Driving Costs Study, 2025)
• Transportation takes about 17% of total household spending (U.S. Bureau of Labor Statistics Consumer Expenditure Survey, 2024)

Depreciation remains the biggest factor – and still the most overlooked. According to AAA, new vehicles lost an average of $4,334 in value per year in 2025.

A note on 2026 tariffs: Import tariffs on vehicles and auto parts introduced in 2025 are pushing new car prices higher. According to Cars.com industry data, new-vehicle prices jumped an average of $1,315 in Q1 2026 compared to the same period in 2025. Factor this into your budget before you shop.

5. How to Research Before You Buy

Buyers may not be prepared, which can be an opportunity for dealers. Be familiar with the questions to ask when purchasing a new vehicle. You will probably have an idea of a brand, type, or model already in mind. So, if you’re going to go to the trouble of negotiating, find out the specs, read reviews, and have price estimates. Particular brands are more popular. This is because of the cost, strength, and upkeep.

For instance, the market share of SUVs and crossovers has risen sharply, accounting for about 80% of all new car sales (Cox Automotive, 2025), which have become more and more multifunctional practical cars.

6. New or Used: Which Is Better?

Used car prices have recently surged, with prices rising over 6% year-over-year in 2026, making them less of a bargain than before. Buying a used car is usually more cost-effective. However, some brands are better bought new, as older models can lead to higher repair costs. Most luxury brands are challenging to maintain. Look at the mileage before the purchase. It is best to go with your mechanic to the dealership before you buy.

7. Set a Budget Before You Shop

Determine your maximum monthly outflow before looking at cars. This prevents “feature creep” where a salesperson convinces you to add packages you don’t need. Use a free budget calculator to map out your full monthly outflow before setting foot in a dealership. If you currently have a vehicle, you may need to learn how to trade in a car with a loan to see how much equity you can put toward your next budget.

8. Don’t Rush the Decision

The dealership is interested in selling, but you must ensure that the car is up to your expectations. Test drive and ensure that you enjoy the ride. In addition, have parts, mechanics, and servicing in your area – this is a must when purchasing a car. If possible, have a mechanic accompany you, particularly when purchasing a secondhand car.

9. Will You Be Able to Resell It?

Resale value is worth thinking about before you buy, not after. If you plan to upgrade or downgrade in a few years, how much you get back matters. New cars can depreciate by up to 48% after purchase, and some brands lose value significantly faster than others. If reselling is part of your plan, research the resale track record of the model you’re considering before signing anything.

10. Look for Deals and Discounts

If it’s not a matter of the newest of the latest, you can end up saving a lot of money by considering used machines. The dealerships may be providing clearance sales, incentives, and discounts to get rid of old vehicles. When financing, do some comparisons to find the most competitive interest rate, the extra few points will make a difference over a long-term loan.

11. Car Prices Change by Season

Studies have revealed that convertibles are more expensive during summer. Typically, the supply of the product or service will be insufficient to meet the demand. On the other hand, four-wheel drives are easier to maneuver in the snow; therefore, they are more expensive in winter. If you’re thinking about purchasing any of these cars, you should know when to purchase them. Knowing when to buy your car on- or off-season can save you hundreds – when the demand is less and dealers are more willing to negotiate, buy a convertible in winter or a 4WD in summer. There may be a difference in price or financing offers that is noticeable even after a few months.

12. Maintain Your Car to Protect Its Value

Your existing car’s value is determined by how well you maintain it, so you get what you put in it. Maintain regular maintenance, maintain maintenance history, and do not make changes that diminish the value of the home. A few things such as replacing tires as necessary and maintaining the interior could start to make a difference on what the buyer will offer. Remember, maintenance is meant to keep your car in working order and to maintain the initial investment, not simply running it.

Conclusion

The purchase price is just the beginning of the costs of a new car. When you’re ready to sign, be sure to consider insurance, fuel, maintenance and depreciation – and how the monthly costs will fit into your overall budget. No matter whether you’re buying new, used or certified used, the best car is the one that fits into your life without overstretching your budget. Please take your time, research and remember a good sales pitch is not a good financial decision!