Purchasing one with cash, yes. Financing one can get a little more complicated.
A Tesla is cheaper than a Buick.
No, really, at least when you break down the amount you earn and how much you pay to finance one, says LendingTree. The loan marketplace website recently ran an interesting poll on financing used cars.
They set out to find the most expensive used makes and models based off the percentage of their typical consumer’s monthly income and payment on each vehicle.
“Contrary to popular assumptions, the results revealed that people aren’t going broke to buy used luxury cars,” the study says. “In fact, buyers of the most expensive cars seem to handily afford them.”
How much does car buying cost?
Over a quarter (27 percent) of Americans plan to buy a car this year, says LendingTree.
Car buying can get complicated when trying to get the most bang for your buck. Financing a car can add up quickly. The total auto loans in the U.S. equaled $1.1 trillion last year. The average cost to finance a new car was $506 a month.
“For most Americans, price and monthly payment are still significant deciding factors, as they are often searching for a vehicle to fit within a certain budget,” says Mike Ouyang of LendingTree’s auto division. “Used cars offer a huge price advantage and are great for those who are less picky about having the most current features. But used cars often have fewer dealer incentives, such as low financing, to capture buyers.”
You can always travel to save on a used car. People do it, and Florida happens to be a state housing three cities with some of the cheapest cars, says CarGuru.
“Shopping local makes sense for most car shoppers, but the adventurous deal-seeker could find a used car far outside their home region and still see big savings,” says Lisa Rosenberg, data analyst at CarGurus. “Expanding your search area moderately can sometimes unearth opportunities to save.”
Financing used does still wind up costing less on average, at $19,329, with the average monthly payment at $364. But there are new cars less expensive than that.
New doesn’t always mean expensive
You don’t have to purchase a used vehicle if you think that’s all you can afford.
GoBankingRates put together a list of the 52 new cars you can own for under $300 a month. There may be something on this list that you love and fits your budget.
“Owning a car does not have to be detrimental to your finances,” says Kristen Bonner, lead researcher on the study. “No matter your credit, you still have a wide range of models to choose from that will accommodate your wants and needs.”
The least expensive car on their list was a Nissan Versa Sedan. The monthly payments were as low as $172 a month.
In case Nissan isn’t exactly your dream make, here’s some others that made the list and all cost less than $300 a month…
- Chevrolet: Has four cars on the list, the Spark ($182), Sonic ($206), Cruze ($251) and Trax ($292)
- Dodge: Dart ($244)
- Ford: Two cars on the list, Fiesta ($203) and Focus ($248)
- Jeep: Three cars on the list, Patriot ($254), Renegade ($259) and Compass ($283)
There are far more foreign vehicles on this list, so let’s just keep it to the top four.
- Fiat:500 ($244), 500 L ($280) and 500 X ($287)
- Honda: Fit ($228), Civic Sedan ($268), Insight ($269), Civic coupe ($274) and CR-Z ($292)
- Hyundai: Accent ($212), Elantra ($247), Veloster ($259) and Elantra GT ($270)
- Kia: Rio ($204), Rio 5-door ($223), Soul ($229), Forte ($230), Forte5 ($260) and Forte Koup ($286)
If you feel on the fence about purchasing a car this year — and don’t mind a used one — here’s a tip: wait until 2019. Used cars are predicted to drop in price to as low as they were during the Great Recession.
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Article last modified on February 23, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: I Thought Buying a Used Car Would Save Money - AMP.