Experts Warn High Gas Prices Shouldn't Push You Into a Costly New Car

Gas prices climbed 43 cents in a single week this March, hitting a national average of $3.54 per gallon according to AAA data, and the spike is driving a familiar impulse: trade in the current car, grab something more fuel-efficient, and recoup the savings at the pump. Experts say that calculation is almost certainly wrong.

"Put simply, in today's market, trying to offset higher fuel costs with a new vehicle purchase can quickly turn a $5 gas problem into a nearly $50,000 decision," said Jessica Caldwell, head of insights at Edmunds.

The average transaction price for a new vehicle reached $48,766 in February 2026, compared with $45,596 in February 2022, according to Edmunds data. Financing has become an even greater barrier. The average annual percentage rate for a new-vehicle loan rose from 4.4% in February 2022 to 7.0% in February 2026, with the average monthly payment climbing from $656 to $775.

Those numbers help explain why the math rarely works in a buyer's favor. A driver switching from a vehicle that gets 20 miles per gallon to one rated at 35 mpg will reduce monthly fuel costs, but the difference rarely approaches the added debt load required to finance a new purchase. Trade-in complications make it worse: trade-in value can further complicate the equation, particularly for owners who bought during the inventory shortage years when prices were inflated.

The affordability problem has been building. A 2025 Edmunds analysis 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, nearly one in five buyers taking on what was once considered an extreme car payment.

Still, the behavioral shift is visible. In the week starting March 2, 22.4% of car shoppers on Edmunds were researching electrified vehicles. Caldwell noted that because gasoline prices only began rising sharply late in the week, the shift in shopper behavior is likely still in its early stages.

For buyers who do decide a switch makes financial sense, patience may be the better strategy. The share of battery electric vehicles is projected to rise from 2% of lease returns in 2025 to 8% in 2026, while hybrids and plug-in hybrids will also account for a larger portion of off-lease inventory. More than 300,000 electric vehicles are expected to come off lease in 2026, a surge of more than 200% from the 123,000 units returned in 2025.

Used EVs currently average $29,922, approximately $1,100 below the average cost for a comparable gas-powered vehicle, and that gap is likely to widen as the wave of lease returns hits dealerships. Anyone reacting to today's gas prices by signing a new-car contract may find they could have waited a few months and bought the same efficiency at a fraction of the cost.

Experts warn gas prices could surpass $5 per gallon if oil reaches $200 a barrel, a scenario that would strain household budgets far more acutely for someone already carrying a $775-a-month car payment than for someone who kept their paid-off vehicle and adjusted their driving habits instead.