Should You Buy A New Car May 2026

In 2026, new car loans average around 7% APR , while used car rates sit much higher at roughly 12% . Well-qualified buyers can even find 0% APR offers from some automakers to move stagnant inventory.

To stay financially healthy, put at least 20% down , finance for no more than 4 years , and keep total monthly costs under 10% of your gross income. should you buy a new car

New cars typically have higher insurance premiums and higher property taxes in certain states. Smart Buying Tips for 2026 In 2026, new car loans average around 7%

New cars can lose 20–30% of their value in the first two to three years. If you plan to sell within five years, buying a 3–5 year-old used car—which has already absorbed this hit—might be better. New cars typically have higher insurance premiums and

A new federal deduction allows you to deduct up to $10,000 in interest on loans for new vehicles assembled in the U.S. for tax years 2025–2028. When to Consider Other Options

In some popular models, like the Toyota RAV4, a three-year-old used version may only be $5,000 cheaper than a brand-new one. When factoring in lower interest rates, the monthly payment on the new car can actually be lower.