7 expert car-shopping tips to navigate today’s market

More and more Americans are falling behind on their car payments, with subprime borrowers suffering the most from soaring vehicle prices and rising interest rates.

The share of subprime borrowers who were at least 60 days past due on their auto bonds hit a record 6.65% in October, the highest level since data tracking began in the early 1990s, according to Fitch Ratings.
The crisis reflects the deeper affordability chasm consumers face in the auto market. The average price of new vehicles exceeded $50,000 for the first time, according to Kelley Blue Book; and that trend is likely to accelerate as retail vehicle prices climb 4% to 8% by the end of 2025 with 2026 models arriving at dealerships across the country, according to Cox Automotive. Meanwhile, auto loan interest rates average 7.1% for a 60-month auto loan, according to Bankrate.

If you’re having trouble making your payments, don’t wait until things get dire, said Sean Tucker, editor-in-chief of Kelley Blue Book.

“You should contact your lender and let them know you’re having difficulty,” Tucker said. “They have programs for that, and generally speaking, they’ll make more money helping you make payments than repossessing your car and trying to sell it later.”

Smart buying advice in a difficult automotive market

Not sure where to start on your car buying journey? Here are some expert tips for finding the best deal for your financial situation.

1. Seek financing Before you are shopping for a vehicle.

Tucker strongly recommends separating these two processes. Having financing offers in hand before choosing a new or used car gives you more leverage in negotiating with a dealer. “It’s a good idea to work with your bank or credit union beforehand and qualify for what you can qualify for,” he said. “Now, if the dealer can beat him, great, but this way you don’t have to accept the terms he offers you.”

2. Consider domestic auto brands first for better deals.

Some domestic manufacturers have about 200 days of inventory, compared to just 30 days for popular imported brands such as Toyota, Tucker said. “That means they’re much more willing to negotiate price with you, and these cars are probably better quality than you think if you haven’t bought a car in a decade,” he added.

3. Increase your down payment amount.

Make a larger deposit – 15 to 20 percent of the sticker price – if possible. This reduces the amount you’ll need to borrow, which can lead to better rate deals.

4. Avoid extended loan terms.

As of October, 27.5% of all auto loans had terms of 72 months (six years) or longer, up 300 basis points from a year ago, according to Cox Automotive’s Dealertrack Credit Availability Index. Although the monthly payment may be lower with a longer loan term, you’ll pay much higher interest for a longer period of time.

“It’s not a good idea to stay in debt for a very long time on a car,” Tucker said. “People really focus on the monthly payment. You want to pay more attention to the outcome of the transaction.”

5. Sell your trade-in privately or buy it from multiple dealers.

If you’re considering selling one car before buying the next one, try selling it privately first. Often, you’ll get a much higher price than a dealer might offer. The other side of the coin? This requires more effort and steps on your part.

If you choose to sell your trade-in vehicle to a dealership, shop it around, Tucker said. “If the dealership you’re working with doesn’t offer you the price you think you’re worth for the trade-in, [it’s] It’s worth a little shopping around,” he added.

6. Prioritize vehicles with extended warranties over luxury vehicles.

You might be tempted to keep up with the Joneses and get a luxury vehicle, but being practical will benefit you in the long run. Look for reliable vehicles with extended warranties; Some brands offer 10-year powertrain warranties, Tucker said. “A nicer car doesn’t add as much quality to your life as keeping the difference in terms of money would,” he said.

7. Buy a used car when possible.

Cars are generally considered a depreciating asset, so it usually makes more sense to buy a used car, especially if you’re strapped for cash. But even though you’ll pay less for a used vehicle, be prepared for sticker shock on these vehicles as well.

According to Edmunds, the average sales price for three-year-old used vehicles exceeded $31,000 in the second quarter of 2025. These vehicles are also taking longer to sell: 38 days, six days longer than the same period last year. Dealers tend to reduce prices on their unsold 2025 inventory to make room for 2026 models, giving you the opportunity to score a better deal on a newer vehicle.