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

Neither new nor used is universally better with a loan; it depends on your budget and priorities, with new cars offering lower interest rates and warranties but higher overall cost and faster depreciation, while used cars are cheaper upfront and depreciate slower, but often come with higher interest rates and potential repair costs, needing careful budgeting. A used car might be better if you can get a great deal and have funds for repairs, whereas a new car is great for predictable costs and low rates if your credit is strong.

Is it better to get a new car loan or used car 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's the smartest way to pay for a car?

The best way to pay for a car depends on your finances, but generally involves paying cash for a used car to save on interest or financing a new car with good credit to keep cash liquid while leveraging low rates; safe payment methods include bank transfers, cashier's checks, or wire transfers for large sums, while a mix of cash and financing (a large down payment with a small loan) is often ideal to balance debt and savings. 

Why does Dave Ramsey say not to buy a new car?

Dave Ramsey advises against buying new cars primarily due to rapid depreciation, where a new vehicle loses significant value (up to 60% in five years) the moment it's driven off the lot, making it a poor investment, and advocates for buying reliable used cars with cash to build wealth instead of staying in debt. He stresses that financing a depreciating asset traps you in debt and keeps you from becoming wealthy, with most millionaires driving older, used cars they paid for in cash. 

What is the 20% 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.

ACCOUNTANT EXPLAINS: Should You Buy, Lease or Finance a New Car

What not to say when financing a car?

"I'm Going to Pay Cash!"

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. So if the salesperson asks about financing, just say you're undecided.

What's a good downpayment for a $30,000 car?

Even smaller down payments still offer advantages

According to auto and financial industry experts, the standard recommended amount is 20% of the sales price for a new car, or at least 10% of the sales price if you're buying a preowned vehicle.

What is a red flag in a dealership?

Car dealership red flags include high-pressure tactics, avoiding direct answers, focusing only on monthly payments, hidden fees, refusing to provide the "out-the-door" price, pushing unnecessary add-ons, a lack of vehicle history reports, and poor online reviews, all signaling potential dishonesty or unfair practices you should avoid by walking away.
 

What is the most financially smart way to buy a car?

The best way to finance a car involves getting preapproved from banks/credit unions before the dealership, making a large down payment (15-20% if possible) to lower interest, and comparing multiple loan offers to find the lowest rate, often from third-party lenders rather than solely relying on the dealer, balancing lower monthly payments with total cost over time. 

What is Dave Ramsey's 8% rule?

Dave Ramsey's 8% rule is a retirement withdrawal strategy suggesting retirees can safely take 8% of their portfolio's starting value annually, adjusted for inflation, by investing 100% in stocks, assuming high average market returns (around 12%). It's a controversial method, contrasting with the traditional 4% rule, as it relies heavily on consistent double-digit market gains and carries significant sequence of returns risk, meaning poor early market performance can deplete the fund faster, making it riskier than diversified approaches.
 

What is the four square trick at a car dealership?

The "4 square" car dealer trick uses a worksheet with four boxes (selling price, trade-in, down payment, monthly payment) to confuse buyers, shifting focus from the total cost of the car to the monthly payment, making inflated prices and terms seem acceptable. Salespeople manipulate these numbers, often hiding the loan term and fees, to create a seemingly good deal that actually costs you more, so buyers should focus on the final, all-in "out-the-door" price first.
 

How much is $40,000 car payment for 60 months?

A $40,000 car loan over 60 months results in monthly payments typically ranging from about $730 to over $800, heavily depending on your interest rate (APR), with lower rates (like 4%) yielding lower payments and higher rates (like 7-10%) increasing costs significantly, plus taxes and fees. For example, at a 4% APR, payments are around $737; at 7%, they're closer to $875, while a higher rate could push payments well over $900, showing the importance of your credit score for securing a good rate. 

Do car dealers like cash buyers?

Paying cash may hinder your chances of getting the best deal

"When dealers are negotiating the purchase price, they anticipate making money on the back end, via financing," Bill explains. "So if you tell them up front you're paying cash, the dealer knows he has no opportunity to make money off you from financing.

What is the cheapest month to buy a new car?

The cheapest months to buy a car are typically October, November, and December, with December being the best as dealers push to meet year-end, quarterly, and monthly sales quotas, plus clear out current-year models. January is also a great time due to lingering model-end vehicles and post-holiday sales fatigue. For used cars, early in the year (Jan/Feb) is excellent as holiday trade-ins flood the market. 

What is the 30-60-90 rule for cars?

The 30-60-90 rule for cars is a preventive maintenance guideline recommending major service intervals at 30,000, 60,000, and 90,000 miles to inspect and service critical components, preventing costly breakdowns, extending the vehicle's life, and maintaining performance and warranty. These intervals involve different levels of service: lighter checks at 30k (filters, fluids), deeper work at 60k (spark plugs, transmission fluid), and major system overhauls at 90k (timing belts, cooling system).
 

Which car flips over the most?

SUVs, pickup trucks, and vans have the highest rollover risk due to their high center of gravity, with specific models like older Ford Explorers, Jeep Wranglers, and large utility vehicles often cited for high rollover rates, while popular high-volume trucks and SUVs like the Ford F-150 and Chevy Silverado are involved in many total crashes and rollovers due to sheer numbers on the road. The Jeep Wrangler Unlimited 4WD and Nissan NV3500 van have shown some of the highest tipping probabilities in specific tests, but modern safety features have improved many newer models.
 

What is Dave Ramsey's rule on car buying?

Dave Ramsey's core car buying rule is to pay cash for used cars, avoiding car payments and debt on depreciating assets; otherwise, the total value of all your vehicles shouldn't exceed half your annual income, and you should only buy new if you have a $1 million net worth. His philosophy emphasizes buying reliable, affordable used cars outright to build wealth, not get trapped by debt on fast-losing assets, stressing total cost, not monthly payments. 

How much is a $30,000 dollar car monthly payment?

A $30,000 car payment varies, but expect roughly $500-$750/month, depending heavily on your down payment, interest rate (APR), and loan term (e.g., 48, 60, 72 months); a larger down payment and shorter term lower monthly costs, while higher interest rates or longer terms increase them. For example, with a decent rate (around 7%) and 60 months, you might pay around $600-$700 monthly, while a 4-year loan could be closer to $730+. 

How to save $5000 quickly?

To save $5k fast, combine aggressive expense cutting (eating out, subscriptions) with increasing income (side hustles, selling items) and automating transfers to a high-yield savings account, breaking the goal into smaller weekly/monthly targets (around $417/month or $96/week) and using strategies like the 100 Envelope Challenge for quick wins. 

What should you never reveal to the dealer when negotiating?

When negotiating with a car dealer, never reveal your monthly budget, your trade-in details (until the car's price is set), your urgency to buy, or that you have pre-arranged financing/cash, as this gives them leverage to hide the total cost and increase profits; instead, focus only on the out-the-door price of the new car first and treat the trade-in as a separate deal. 

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

The 20/3/8 car rule is a guideline for buying an affordable, reliable vehicle: make a 20% down payment, finance for 3 years or less, and keep total monthly car expenses (payment, insurance, etc.) under 8% of your gross monthly income, helping you avoid being "underwater" and maintain financial health, according to Money Guy and Chase Bank. 

What not to do at a car dealership?

The Nine Worst Things to Do at the Car Dealership

• Don't go in confrontational.
• Don't walk in with no idea what you want. ...
• Don't go to the lot before you've done your research. ...
• Don't skip the test drive. ...
• Don't skip the negotiating process. ...
• Don't skip getting pre-approved for a car loan.

How much is a car payment on $35,000 for 60 months?

For a $35,000 car loan over 60 months, your monthly payment will vary significantly with the interest rate (APR), but expect payments roughly from the high $500s to over $700, depending on your credit; for example, at 4% it's around $645, while at 10% it's closer to $730-$740, and higher rates mean higher payments, impacting total interest paid. Use an online auto loan calculator to input your specific APR and see exact figures.
 

What APR is considered good for car finance?

Car Loan APRs by Credit Score

Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used. Poor (450 - 649): 12.84 percent for new, 20.43 percent for used.