Should You Buy A New Car May 2026

Federal tax credits for EVs were killed in late 2025, making new EVs significantly more expensive. Leasing an EV may be safer due to rapid technology changes and faster depreciation.

In 2026, new car loans average around 7% APR , while used car rates sit much higher at roughly 12% . Well-qualified buyers can even find 0% APR offers from some automakers to move stagnant inventory. should you buy a new car

New cars can lose 20–30% of their value in the first two to three years. If you plan to sell within five years, buying a 3–5 year-old used car—which has already absorbed this hit—might be better. Federal tax credits for EVs were killed in

A new federal deduction allows you to deduct up to $10,000 in interest on loans for new vehicles assembled in the U.S. for tax years 2025–2028. When to Consider Other Options Well-qualified buyers can even find 0% APR offers

In some popular models, like the Toyota RAV4, a three-year-old used version may only be $5,000 cheaper than a brand-new one. When factoring in lower interest rates, the monthly payment on the new car can actually be lower.