Cars
Add depreciation, interest, insurance, fuel, and maintenance to the sticker. How long loans hide expensive cars, and a used-vs-new rule of thumb.
Updated 2026-09-08 · 8 min read
Sticker, sales tax, interest, insurance delta vs your current car, fuel, maintenance, and depreciation. The payment is a financing choice, not the cost.
A $42,000 car at 7% for 72 months can have a 'comfortable' payment and still cost more than a $24,000 car paid off in four years — before insurance.
If you roll leftover loan into the next car, you are financing a ghost. Pay the gap in cash or keep the car until the loan is smaller than private-party value.
Run the numbers: car loan calculator.
It can make a car you cannot afford look affordable. You stay underwater longer (loan > value), so an accident or sale leaves a bill. Prefer 36–48 months, or a car whose 48-month payment already fits.
New loses the steepest value in years 0–3. A 2–4 year old car with remaining warranty often has the best cost-per-mile if you inspect it. Reliability data beats a pretty APR ad.
Educational only. Verify IRS limits and loan quotes before acting.