Edmunds: Five big mistakes you need to avoid before buying your next new car
By JOSH JACQUOT for Associated Press
Buying a new car has never been more financially daunting. A 2025 analysis from Edmunds found that a record 19.3% of consumers who financed a new vehicle in the second quarter of 2025 committed to a monthly payment of $1,000 or more. That’s nearly one in five buyers taking on what was once considered an extreme car payment — driven by high interest rates and rising vehicle prices.
While it might be tempting to stretch your budget for the car you want, locking yourself into a high-cost loan can be a painful mistake. Before you sign, here are five common car-buying missteps to avoid.
Buying a car you can’t (or shouldn’t) really afford
There’s a difference between being able to buy something and being able to afford it wisely. With an average new vehicle transaction price of approximately $49,000, many buyers are truly stretching their budgets. It’s not uncommon to see buyers opt for extended 72-month or 84-month financing terms.
That shiny SUV might seem within reach thanks to flexible financing, but the long-term hit to your financial health could be considerable. Buying within your means — ideally targeting a loan term of no more than 60 months and keeping your car-related expenses under 15%-20% of your monthly take-home pay — is smart shopping in an era of rising interest rates and ever-increasing car prices.