Jill Schlesinger shares car-buying tips as prices and rates stay high

Car shoppers are running into a market that still rewards patience and punishes impulse. Average new-car prices have pushed into record territory, financing costs remain heavy, and the monthly payment can hide how expensive the deal really is.

The market is still stacked against hasty buyers

Jill Schlesinger, CBS News’s Emmy-nominated business analyst and a certified financial planner, is framing her advice around one central reality: this is still an expensive time to buy a car. Kelley Blue Book and Cox Automotive reported that the average new-vehicle transaction price in March 2025 was $47,462, and Kelley Blue Book said the average American new-car buyer paid $50,080 in September 2025, the first time that figure topped $50,000.

Used cars are not offering the kind of relief many buyers hoped for either. Manheim, whose Used Vehicle Value Index tracks wholesale used-vehicle prices and is published monthly, said used values have stayed in a relatively narrow range for more than four years. That means buyers comparing new and used vehicles are often choosing between expensive options rather than finding a true bargain.

Trap 1: thinking only in monthly payments

The biggest mistake in today’s market is treating the monthly payment as the only number that matters. That can make a car look affordable even when the total cost is stretched across a much longer loan, especially when the payment is dressed up with a low rate, a long term or a small down payment.

That monthly-payment mindset is especially risky because the broader cost of owning a car is already high. CBS News has reported that the average cost of owning and operating a car is estimated at about $1,000 per month. If the payment is $758, which J.D. Power said was the record average monthly auto finance payment in October 2025, there is very little room left for insurance, gas, maintenance, registration and repairs before the budget starts breaking.

The smarter approach is to work backward from the total price, not forward from the payment. Start with what you can truly afford over the life of the loan, then let the payment be a result of that limit, not the goal itself.

Trap 2: underestimating financing costs

Borrowing costs remain a major drag on car affordability. The Federal Reserve’s consumer credit data show that new-car loan rates at finance companies were 6.4% in the latest available reading, a level that can add thousands of dollars in interest over the life of a loan. J.D. Power also said loan terms are routinely stretching to 84 months, which can lower a payment but increase the amount of interest paid and keep borrowers underwater longer.

That is why the rate matters as much as the sticker price. A buyer who focuses only on shaving a few dollars off a monthly payment can easily give back the savings through a longer loan term or a higher rate. Schlesinger’s guidance fits a simple rule: compare the total cost of credit, not just the size of the payment.

A practical financing framework looks like this:

• Get preapproved before you shop so you know the rate you can actually qualify for.
• Compare the loan term carefully, because 84 months may feel manageable but can lock you into years of payments.
• Treat any dealer financing offer as a quote to beat, not automatically the best option.
• If the rate is high, consider waiting, improving your credit score or increasing your down payment before buying.

Trap 3: getting buried in add-on fees

The last money trap is often the easiest to miss because it shows up late in the process. Add-on fees, extras and packaged products can make a deal look acceptable until the final paperwork lifts the price well above what you planned to spend. In a market where the average buyer is already paying more than $50,000 for a new car, every extra charge matters.

That is why the first thing to negotiate should be the out-the-door price, not the monthly payment. Once the base price is settled, you can evaluate registration charges, documentation fees, dealer-installed accessories and optional products one by one. If you do not understand a charge, ask for it in writing and decide whether it belongs in the deal at all.

This is also where discipline matters most. A buyer who is already stretched by a high loan rate can be pushed into a worse deal by small add-ons that seem minor in isolation. The real test is whether each fee improves the car you are buying enough to justify the cost.

When buying now makes sense, and when it does not

There are still situations where buying now can be rational. If you need a vehicle immediately, can put down enough cash to keep the loan short, and qualify for a rate close to or better than the 6.4% benchmark in the Fed data, the market may still work for you. A strong credit profile and a firm cap on total price can keep the damage contained.

But if you are shopping mainly because you want a lower monthly payment, waiting may be the better financial move. The combination of $50,080 average new-car prices, record $758 average monthly finance payments and 84-month loan terms means the market is still built to extract more from buyers who rush. If your current car is functioning and your budget is tight, keeping it longer can be cheaper than replacing it under pressure.

When a used car is the better choice

Used cars can make sense when the goal is to cut depreciation, but buyers should not assume the used market is deeply discounted. Manheim’s data show wholesale used-vehicle values have stayed elevated and relatively stable for more than four years, which means the gap between new and used is not always wide enough to justify switching on price alone.

The better time to choose used is when the vehicle offers a meaningful reduction in total cost, not just a lower sticker. That includes lower insurance, a shorter loan and a price that fits your budget without stretching the term. If the used car still requires a long loan at a high rate, the savings may disappear quickly.

The cleanest decision rule is this: buy only when the full package, price, rate, term and fees, fits your finances without relying on optimism. In a market where cars can cost about $1,000 a month to own and finance payments have hit records, the best defense is to negotiate from the total cost down.