If you are in the market for a car, it can be overwhelming when trying to decide How Much Should I Pay for A Car & How much a car should cost. There are ways to save money and some tips to make sure you do not get ripped off.
For a good used car, about 5 years old with 60k miles on it will cost 30 to 40% of the new price. A fairly used car with high mileage may cost 20 to 30%. While you can expect to pay between 23k to 25k for a brand-new commuter vehicle that will be good on gas and last a long time. New Trucks will cost between 33 to 35k. Full size SUVs can cost from 35k up to 60K. And fancy luxury or performance cars over a 100k.
This article is focussed on regular cars but if you prefer green clean energy efficient vehicles, talking about electric cars.
There are several things to consider to get your answer for “How Much Should I Pay for A Car?” You should also consider other minor details of car accessories or customizations like what kind of stereo system setup you need, and save some budget for that.
How Much Should I Pay for A Car? Things to Consider
Decide If You are Buying a New or Used Vehicle
The first decision to make to decide how much you will pay is to figure out if you will be getting a new car right off the lot or a used car. This is always dictated by how much money you have to spend. A new car is going to cost more money, of course, but it will last longer (most of the time). A used car will be more affordable but may come with some repair issues and will usually have no warranty. Some used car dealers will refurbish all the vehicles that come in and offer a short warranty period like a month or maybe a year at most.
Benefits & Downsides of Buying a New Car
- Factory warranty
- No mechanical issues or repairs for a while
- Clean inside and out
- Will have a new sound system
- Most have built-in navigation
- Car buying experience at a dealer can be a hassle
- Financing means monthly payments which are not fun to pay every month
- Some new car models have issues you will not know about until the model has been on the road a while.
Benefits & Downsides of Purchasing a Used Car
- Will cost much less money
- Depending on the brand it may last as long as a new car would
- Will be less likely to be broken into or a target for theft
- Will not have to worry as much about getting it dirty
- Some used car models are no longer made and look awesome (like vintage Chevys)
- You do not really know what issues the car may have
- All used cars may have some cosmetic defect like dents or scratches
- Mileage and wear on the car and engine will be much higher than a new car
- May have to wash the seats and rest of the car before you drive it
Figure out what your needs are, and whether you need a brand-new vehicle or if a used car is going to work for your situation. Based on this, you will know whether to buy new or used.
How Much Should I Pay for a New Car?
Figuring out how much to pay for a new vehicle is not as difficult as it seems at first. To learn how much to buy, the first question is not how much should i pay for a car but you just need to decide what kind of car you want first.
Would you want a gas powered or a deisel run car? Some people may be particular about certain brands of cars that they prefer. Maybe you should also consider where are they made from? If you want to buy a US made vehicle, European specs or a Japanese made car.
What are you going to use the car for? If you need a commuter vehicle for yourself and you are not carting around multiple people you should be looking for a compact vehicle that is good on gas. If you have a construction job or another job where you need to haul things you will need a truck or van. If you have a big family and will be doing a lot of traveling road trips and camping you should be looking for an SUV.
Once you know what you need the vehicle to do, you can price check the market for that type of vehicle. The list below is a good starting point.
Brand New Commuter Vehicles Brands and Price Ranges
- Toyota Corolla 23k-25k
- GMC Terrain 25-27k
- Hyundai Tucson 23-25k
- Nissan Rogue 22-25k
As you can see, you can expect to pay between 23 to 25k for a brand-new commuter vehicle that will be good on gas and last a long time.
New Work Trucks Price Ranges
- Nissan Titan 36-38k
- Honda Ridgeline 33-36k
- Toyota Tundra 33-35k
- Dodge Ram 32-34k
New Trucks are going to cost about 10k more than commuter cars, averaging around 33 to 35k. These are more expensive than getting a car because the engines are more involved and bigger.
New Family SUV Price Ranges
SUVs have different styles, the larger the SUV the more expensive. Full size SUVs can cost from 35k up to 60K. Subcompact SUVs can be about as much as commuter vehicles ranging from 23k up to 30k. If you do not need a full-sized SUV you should get a sub-compact and save a lot of money.
How Much Should I Pay for a Used Vehicle
This depends on what style of car you need. The same things apply here as with new cars. Figure out what you need first, and then you can price shop and find the best deal for your needs.
Used Commuter Car Price Ranges
Coming up with prices for used commuter cars is much more difficult than new cars. It’s a good idea to look out for a car with good mileage. The older the car the less it will cost, but the more likely it is to have problems. You can get a ten- to a twenty-year-old 4-cylinder commuter car for as little as 3k. The car will run but may not have many more miles left in it.
Used Cars with Recent Models
If you get a car that is only 5 years old, it will usually cost about half as it did when it was new (maybe a little more or less). For example, if you can buy a Toyota Corolla new for 23k you can expect to pay up to 12k for a five-year-old Corolla in good to excellent condition.
Half of the new price is what you would pay for a near-perfect five-year-old commuter car. What is more common is to pay about 30% of the new price for a car of this age.
NOTE: Used Car Condition & How it Affects Value
Condition is everything when buying a used car. Mileage is included in the condition. If a used car is in good condition, only 5 or so years old, and has only 60k miles on it you can expect to pay 30 to 40% of the new price. If the condition is fair and the car has high mileage, you can expect to pay 20 to 30% of new cost. If you can remember these percentages, it will be an easy rule of thumb to keep in mind when shopping for a used car. Of course, there are tools and websites to help you find the best deal.
The Answer “How Much Should I Pay for A Car” Is?
Now that we have gone into detail about car price ranges and all the things to consider before purchasing any vehicle, it is time to put it all together.
New Cars can range in price from 23k all the way up to over 100k for fancy luxury or performance cars. Most people that just need a good car to get them around can do very well for just over 20k.
Used cars also range in price from a couple of grand all the way up to 30k or more for high-end vehicles that are not old.
I hope the answer is somewhat clear on how much should i pay for a car? Or not?
Car Buying Advise
The best advice if you are looking for a car and want to know how much to pay is to remember this:
When buying new, do not buy based on your desire, but based on your needs and get the cheapest car that can do the job you need it to.
When buying used, keep in mind that the older the car the cheaper it will be, but the more issues it may have. The best kind of used car to buy is one that is about 5 years old or so, and then expect to pay from 25 to 50% of the new price depending on the mileage and condition.