Spring survey: Consumers plan to buy cars despite costs
If current events have made you question whether you should buy a vehicle right now, you're not alone. Recent surveys suggest potential price increases are on everyone's minds.
The auto market has had a lot of ups and downs since 2020, and now a hard-to-predict tariff policy is adding even more uncertainty. Surveys show some consumers have canceled their plans to buy or lease a vehicle this year. However, not everyone is scared off buying: Around 17% of consumers say they are very likely to buy in the next year, according to a 2025 survey by HarrisX in coordination with Allison Worldwide.
Maybe those 17% of consumers know you can still find ways to save money on your next vehicle, even in an uncertain market. Vehicle selection, comparison shopping, and finding the right auto loan can all make a big difference in your monthly payment.
Key Takeaways:
Surveys show many consumers plan to buy or lease a car in 2025, despite worries about price increases and tariffs.You could still minimize costs on your next vehicle, even if prices go up.Choosing the right model, shopping around, and qualifying for a lower interest rate can all make purchasing a vehicle cheaper.
Freedom Debt Relief provides some simple steps to follow while car shopping to help you save the most money.
Step 1: Make a plan (and stick to it)
Most people don't want to impulse-buy a vehicle, so it's important to have a plan in place. The sooner you start planning, in fact, the better off you'll be, since you'll have more time to save for your purchase and shop around.
Not sure where to start? Consider these points:
How much can you afford? If you plan to pay cash, don't deplete your savings or derail your retirement planning. If you're financing with an auto loan, budget for an affordable monthly payment. One popular rule is to spend no more than 20% of your annual gross income on a car.What kind of loan do you need? A longer loan makes your budget stretch, but it costs you more in the long run, thanks to interest fees. Find the sweet spot between what you can afford monthly and what will cost you less overall.What will insurance cost? Purchasing the vehicle is only a part of the cost. You also need to insure it. Factor the cost of insurance into your budget and plan. You can get quotes before you buy the car.What do you really need from your vehicle? Remember that the main purpose of your vehicle is transportation, and they are available at many price points. Don't go over your budget trying to impress people, or for bells and whistles you don't really need.
Step 2: Choosing a car
Once you know what you can safely spend, choose a make and model that fits both your budget and your needs. This may take some time given all of the options, but it's a vital step. Here's some advice for choosing the right vehicle:
Research price, features, safety, mileage, and reliability. You can find a lot of good data online through reliable auto reporting sites like Car and Driver.Make sure the vehicle fits your lifestyle, because early depreciation and trading-in can cost you a lot. You might yearn for a tiny sports car, but your family probably won't love it if you sardine them on every road trip.Consider all ownership costs when comparing cars: repairs, maintenance, gas, and insurance. Check out the Edmunds.com cost of car ownership calculator to compare the annual expenses of different makes and models.Compare costs of new vs. used for your desired model. In some markets, the cost difference may not be as much as you expect, making a new vehicle roughly as affordable as a used one.For used cars, get a CarFax, VINCheck, or AutoCheck report to see the vehicle's history before committing.Experts recommend a pre-purchase inspection from a licensed mechanic, even if a used car is "certified." Expect to pay around $85 to $150, but it could save you thousands in repair bills.
Step 3: Shopping for the best price
The cost of a given make, model, and year can vary by thousands from one dealer to another. Dealer fees can also add a lot onto the cost of your vehicle, so you always want to shop around for the best overall price.
Use these tips to find the best car prices:
Be flexible about make, model, and color. Have a list of cars you'd accept, and be ready to compromise on anything that isn't a deal-killer.Expand your search. Consider big and small dealers, rental agencies, out-of-town (or out-of-state) dealers, and (for used cars) private parties.Use the internet. View more cars in less time, and set up alerts or notifications on the sites you visit.Be prepared to move fast. Once you find the right deal, having pre-approved financing can help a lot. If a dealership or individual needs to unload a car quickly, the price will likely be a little lower. But they won't sell to you if you can't close the deal and pay immediately.Consider a trade-in. You can offset some of today's hefty price increases if you have a trade-in, because their prices are also higher. Also look into selling your old car versus trading it in, because you may get quite a bit more from a private buyer than the dealership.Negotiate for extras. Dealers may not be willing to drop their prices, but you may be able to negotiate some high-margin freebies like extended warranties, cheaper financing, or free oil changes.Don't focus only on monthly payments. Instead, have a firm budget for the total price of the vehicle. Lowering your monthly payment tends to make your overall cost much higher.
Step 4: Borrowing for less
Other than vehicle price, the main factor impacting your car payments is the interest on your auto loan. The lower your interest rate, the lower your costs will be, both for your monthly payment and overall.
Consider this when shopping for an auto loan:
Check your credit reportand FICO score before shopping. You won't know what interest rate is fair unless you understand your credit profile. The higher your credit scores, the lower your interest rates tend to be.Dispute credit report errors. If your credit report contains score-reducing errors, clear them before shopping for a car. You can dispute errors with each credit bureau online.If your score is low, work on raising it. If you don't need to buy immediately, you may have time to improve your credit score. Even a few points can make a big difference, according to FICO's Loan Savings Calculator. For example, increasing from the 660-689 range to the 690-719 range can save you over $2,000 during the life of a $30,000 five-year loan.Line up financing in advance. Get quotes from several competing lenders, including credit unions and banks, auto financing companies, and secured personal loan providers.Add up total costs. There are several moving parts in auto financing: vehicle price (minus any rebates), interest rate, and loan charges. When comparing offers, add up the total cost over the entire life of the car-down payment, plus loan fees and anything else you pay upfront, plus the total of all payments over the loan term. The lowest amount wins.
Step 5: Play the waiting game
The used and new auto markets are in a bit of a murky situation right now, but that won't always be the case. Sometimes, when you're not sure of the right move, the best thing you can do is wait.
If your vehicle is still safe and reliable, it might be best to hang on to it for a little while as the market settles. This also gives you more time to save money for the down payment and/or boost your credit score-moves that can make your new car more affordable in the long run.
In the end, the best car for you isn't the one with the most bells and whistles; it's the one you can best afford.
FAQs
What is the lowest credit score to buy a car?
Unlike with mortgages, there is no minimum credit score for auto loans. You may find a dealer that will finance a loan even if you're in "deep subprime" territory, which is a score in the 300-500 range.
However, Experian reckons that only 1.79% of all auto loans originated in 2021 were deep subprime loans. So you may have to seek out someone willing to play ball. And you can be pretty sure you'll be paying a very high interest rate on such a loan.
What Is the difference between secured and unsecured debt?
Secured debt is guaranteed by something valuable (collateral) that you agree to give up if you can't repay the debt. Car loans and mortgages are secured debts. If you default on the loan, the lender could sell the collateral to get the money you owe.
Unsecured debt is a loan that you qualify for based on your creditworthiness. The risk to the lender is that if you don't repay the debt, the lender is stuck with the loss. That's why unsecured loans tend to cost more than secured loans.
Can a budget app help me save money?
Yes, budget apps could help you save money by helping you create a budget and track your spending and income. Popular budget apps include Goodbudget, PocketGuard, EveryDollar, MoLO, and YNAB.
This story was produced by Freedom Debt Relief and reviewed and distributed by Stacker.
© Stacker Media, LLC.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBS News
15 minutes ago
- CBS News
Is debt forgiveness or debt management the better choice this August?
As high interest rates remain the norm and the cost of everything from groceries to housing continues to rise, it's getting harder for those with credit card debt to fit both their necessary expenses and their debt payments into their budgets. To make the numbers work, some are cutting back on their spending. Others are refinancing or consolidating their debt to make it more affordable. But for those who are feeling truly stuck between their regular expenses and their debt obligations, two strategies — debt forgiveness and debt management — are drawing more attention. These terms are sometimes used interchangeably, but the reality is that they're two very different paths to debt relief, and as a result, they can have very different outcomes. One option, debt forgiveness, promises to shrink the amount you owe, while the other focuses on making repayment more affordable and structured. But while both can help lower your payment obligations, each option comes with its own set of trade-offs that could affect your credit score, taxes and even your future borrowing power. As a result, choosing between them isn't a decision to make lightly. Before taking a step in either direction, it's important to understand the risks and benefits to determine which one may be the better option this August. Find out how to get started with the right debt relief program today. Debt forgiveness involves negotiating with your creditors, often with the help of a debt relief company, to accept less than the full amount you owe. If the negotiations are successful, you could settle your debt for 30% to 50% less than the original balance, on average, in return for a lump-sum payment on the account. That can help you save significantly on the cost of your debt. Debt management, on the other hand, is typically facilitated through a credit counseling agency. Instead of reducing your total balance, the agency helps you set up a payment plan that works with your budget. The credit counselor then negotiates with creditors to lower your interest rates and consolidate your payments into a single monthly bill. You still repay your debts in full, but you may save significantly on interest and fees. So, how do you know which one could be the better option this August? Here's what to consider: Debt forgiveness makes the most sense this August if you're facing true financial hardship with no realistic path to paying off your debts in full. If you're dealing with a job loss, medical emergency, divorce or other major life event that has reduced your income, having a portion of your debt forgiven might be your most practical option. It's also generally worth considering if your debt-to-income ratio is so high that you'd need more than five years to pay everything off. With debt forgiveness, the math can be compelling for the right borrower. For example, if you owe $30,000 across several credit cards and can settle for $15,000, which is a 50% reduction, you've essentially saved $15,000, minus fees and tax implications on forgiven debt. Debt relief companies typically charge 15% to 25% of the enrolled debt amount, so you'll need to factor those costs into your calculations. However, there are tradeoffs to consider, even for the right types of borrowers. One major downside of pursuing this type of debt relief is that your credit score will drop during the process, and it involves months of delinquency, creditor calls and potential lawsuits. So, it's not necessarily a quick fix. Forgiven debt over $600 also becomes taxable income, so if you take this route, you might owe more than expected when you file your taxes. Learn more about your debt relief options online now. Debt management, on the other hand, will generally work best this August for borrowers with steady incomes who are drowning due to the rapidly compounding interest charges on their credit cards. Those who are lacking the funds to continue making payments may struggle with this option, though, as you'll still be required to pay back what's owed, just with a lower rate and fees. Credit card rates are averaging over 21% this August, but a debt management plan can slash rates in half (or more) while consolidating your enrolled debts into one monthly payment. On $25,000 in credit card debt, this could save you thousands of dollars in interest and cut your payoff timeline down dramatically. And, because most credit counseling agencies are nonprofits, the monthly fees on this type of debt relief tend to be lower than what you'd pay to a debt relief company. The catch? You'll need to close enrolled credit cards and stick with the plan for years without missing payments. Drop out early, and you could end up worse off than when you started. But for disciplined borrowers who simply need breathing room from crushing interest rates, debt management offers a path forward this August — one that actually preserves and eventually improves your credit score. Debt forgiveness and debt management both offer ways to regain control over your finances, but they serve different needs. Debt forgiveness aims to reduce your total debt when repayment is out of reach, while debt management helps you pay it off in full with reduced interest and simplified payments. As a result, neither is inherently "better" for everyone this August; your choice should be guided by your income, debt load, credit goals and tolerance for potential consequences. Whichever path you take, though, remember that a clear plan and consistent follow-through can help you move from debt stress to financial stability.
CBS News
21 hours ago
- CBS News
How to prepare for a debt relief program: 4 steps to take
While carrying high amounts of debt is rarely ideal, this issue isn't always the result of reckless spending. For many Americans, it's caused by the fallout of rising living costs, medical emergencies, job loss or simply trying (and failing) to keep up with the payments on high-rate credit cards. After all, as those balances grow and the compound interest piles up, what once felt manageable can quickly spiral into an overwhelming problem. That's where debt relief programs can be key. These services, which are offered by debt relief companies, aim to reduce, restructure or consolidate what you owe, making it easier to get back on your feet. And with credit card interest rates still hovering near record highs right now, more borrowers are turning to their debt relief options to find breathing room and a path forward. But signing up for debt relief isn't just about making a call or filling out a form and hoping for the best. To get the most out of the process (and avoid costly missteps), you need to take a few steps to prepare. Learn more about your debt relief options here. If you're thinking about enrolling in a debt relief program, here are a few steps you should take to get ready before committing: The first and perhaps most essential step to take before enrolling in a debt relief program is to review all of your debts and create a list or spreadsheet outlining exactly what you owe. That includes not just the total balances on your loans, medical bills, credit cards, buy now, pay later loans and other types of debt, but also the interest rates, due dates and minimum payments for each account. This exercise serves a few purposes. For one, it helps you determine whether you're a good candidate for debt relief. Most programs are designed to help with unsecured debt, like credit cards or medical bills, not secured loans like auto loans or mortgages. It also helps you and your debt relief provider identify which accounts to target and determine how much you might realistically save. You also need to thoroughly review the income sources that you can use to help fund the dedicated bank account where you'll deposit money for the debt relief company. Debt settlement only works if you can consistently make your program deposits and have money in that account available to pay the settlements. It's equally important to understand the financial obligations you have in addition to your debts so you have an accurate estimate of how much money you can put into your dedicated account. Make sure to include expenses like utility bills, childcare, groceries, transportation and other recurring costs. Find out how to start the debt relief process today. Debt relief isn't a universal solution, and each program type comes with trade-offs. Pursuing debt settlement can reduce the amount you owe, for example, but it may damage your credit in the short term. Debt consolidation, on the other hand, can simplify your payments and lower your interest rate, but it often requires good credit to qualify. So, before moving forward, take the time to learn how each approach could impact your finances, from your monthly payments to your tax burden and your credit profile. A reputable debt relief provider can walk you through the pros and cons of each option, but it's also wise to do your own research ahead of time. That way, you're not caught off guard by fees, credit score drops or tax liabilities on forgiven debt. Debt relief programs require you to make regular payments, whether you're contributing to a settlement fund or repaying a debt consolidation loan, so it's crucial to understand how much you can comfortably afford each month. Start by reviewing your income, fixed expenses (like rent and utilities) and variable costs (like groceries and gas), and then cut any unnecessary spending and redirect that money toward your debt. Having a realistic budget in place before starting a program can prevent missed payments and keep you on track. If you're planning to start a debt relief program, it's time to stop using your credit cards and avoid applying for new ones. Most programs require you to close or stop using your credit accounts, and continuing to rack up new debt could disqualify you or derail your progress. So, focus on living within your means and using only cash or debit instead. This may feel like a tough transition, but it's a necessary mindset shift, one that can help you maintain financial stability long after the program ends. Debt relief can offer a powerful way to regain control of your finances, but preparation is an important part of the process. By reviewing your debts, checking your credit, setting a budget and changing your approach to using credit, you'll be setting yourself up for a smoother experience. Whether you're just exploring your options or are ready to enroll, these steps can help you approach the debt relief process with confidence.
CBS News
a day ago
- CBS News
Should you try to negotiate credit card debt relief on your own? 3 things to know first
High-rate credit card debt has become a crushing reality for millions of Americans, who added a collective $27 billion to their credit card balances in the second quarter of 2025. The total amount of credit card debt is now sitting at a record-high of $1.21 trillion nationwide, while the average credit card rate is closing in on 22%. As a result, what may have once been manageable debt has become a big issue for many cardholders. And, as the cost of living continues to rise, those trapped in this cycle of debt may have an even harder time finding their way out. When the weight of credit card debt becomes too heavy, the instinct is often to seek help from a debt relief company. These companies often claim they can help you slash your balances by 30% to 50% or more, and the appeal of that is understandable. After all, who wouldn't want someone else to deal with their debt issues while potentially saving thousands of dollars on what they owe? However, there's another option that many people overlook: negotiating directly with your creditors instead. But while going the DIY route can be appealing, there are a few important factors that you'll want to fully understand before making your first call. Find out how to get help with your high-rate credit card debt today. Negotiating debt relief on your own has some clear benefits. You can avoid the fees that professional debt relief companies charge and you stay in direct control of the negotiations. You also eliminate the risk of working with a disreputable company, which is a concern in the debt relief space. Still, creditor negotiations can be complex and high-stakes, so you'll want to consider these factors first, which can make or break your efforts: Debt negotiation involves repeated, often stressful conversations about your financial issues, and your creditors may not agree to your first offer, or your second, either. Successful negotiations can take multiple calls, letters and follow-ups, and you'll need to be ready with documentation that supports your financial hardship, such as proof of income loss, medical bills or other major expenses. You'll also need to have a realistic settlement amount in mind. Creditors are more likely to agree if you can offer a lump-sum payment that's significantly higher than what they might recover through collections, but lower than your total balance. And if they counteroffer, you'll need to decide quickly whether to accept, reject or push for better terms. That can get tricky without help from the experts, but it may be possible to navigate if you do your research first. Learn more about the benefits of working with a debt relief company now. Successful debt negotiation requires understanding complex legal and financial concepts that most people haven't encountered before. You need to know your rights under the Fair Debt Collection Practices Act, understand when debts can be legally pursued and recognize valid settlement offers versus potentially harmful agreements. There are also critical timing considerations, like knowing when to negotiate and when certain debts might be approaching the statute of limitations. That can make it tough to navigate on your own, which is why some borrowers opt to work with a debt relief specialist who understands these nuances and has established relationships with major creditors. These experts know which companies are more likely to settle, what offers are typically accepted and how to structure agreements to protect your interests. They can also identify red flags you might miss, such as agreements that don't properly close accounts. A debt settlement can create ripple effects beyond the immediate savings. If $600 or more of your debt is forgiven, it may count as taxable income. Without proper planning, you could face an unexpected tax bill that eats into your savings. And depending on how your settlement is reported to the credit bureaus, it could also impact your ability to borrow in the future. Those repercussions can be difficult to avoid, so for some borrowers, it's worth the extra costs to use a debt relief company during the process instead. Doing so can help you understand these downstream effects and how to best handle them. The right expert can also help you coordinate with a tax professional if needed, explain how a settlement will impact your credit and, in some cases, help you take steps to minimize the damage. Negotiating credit card debt relief on your own can save you money on fees and give you more control over the process, but it's not without its challenges. You'll need to be prepared for potential credit score impacts, a lengthy and sometimes frustrating negotiation process and possible tax consequences down the road. If you have the time, knowledge and persistence to make a strong case, though, DIY debt relief could be a viable option. But if you're unsure about handling the process or navigating the potential pitfalls, it may be worth at least consulting a reputable debt relief service to help you make the most informed decision.
