Is It Time to Buy a New Car?

Deciding whether to buy a new car or keep your current one really comes down to weighing the costs and benefits.

Most vehicles on the road today are around 12 years old, and many can last up to 200,000 miles if maintained properly. To make a smart decision, ask yourself some key questions:

1. Why do you want a new car?
2. How many miles are on your current one?
3. Is it safe and reliable?
4. What’s the cost of upkeep, and is it still serving your lifestyle needs?

Finances usually play the biggest role in this decision. If maintaining your current vehicle is starting to cost as much as a new car payment, it might be time to consider upgrading. Keep in mind that the cost of a new car includes more than just the loan—it also involves insurance, taxes, registration, depreciation, and interest. Ideally, car expenses should stay within 15% of your budget, and your total household debt should not exceed 36% of your take-home pay. Taking the time to run the numbers can help you make a confident and financially sound choice.  

If your car is nearing the end of its life, it might be time to explore new options. A newer vehicle can offer better fuel efficiency, modern safety features, and the peace of mind that comes with a warranty—plus, it’s likely to be more reliable overall.

Start by reviewing your annual car budget and how much of it you're currently spending on maintenance. If repairs are eating up a large portion (say, close to 50%) it may be more cost-effective to upgrade. Lifestyle changes, like a longer commute or a new job, can also be a good reason to consider a vehicle that better fits your current needs.

Before buying, make sure your current car loan is fully paid off. If not, you’ll need to either clear the balance or roll it into a new loan, which could significantly increase your monthly costs. It’s also a good idea to check the current value of your car, especially if your loan balance is higher than what the car is worth. If you need help determining your vehicle’s value, we're happy to assist.

If a new car isn’t in the budget but your current vehicle is draining your finances, a reliable used car can be a smart and affordable solution. Many used cars coming off lease have low mileage and have already been serviced by the dealer, making them solid options. To ensure you're getting a good deal, look for vehicles that were well-maintained and check their history on services like CARFAX.

Used cars also offer better long-term value. Since new vehicles lose value quickly—about 20% in the first year and another 15% each year for the next few—buying used means you avoid the steepest depreciation. If you plan to keep your car for a while, this can save you money and help your investment go further.

Leasing a new car can be a smart and flexible alternative to buying, especially if your current vehicle is no longer safe or cost-effective. It’s also a practical option if you’re not ready to commit to owning a car long-term or if you anticipate lifestyle changes that might require a different type of vehicle. Leasing offers lower upfront costs and the freedom to switch cars more frequently, making it attractive for many drivers.

However, there are important trade-offs to consider. Leasing is similar to renting a home—you don’t build equity in the car, and its value depreciates over time. Most leases also come with mileage limits, typically between 10,000 and 15,000 miles per year. Staying within those limits can help avoid costly overage fees, which can add up quickly.

On the bright side, if you love the car at the end of your lease, you often have the option to buy it—usually at a lower cost than purchasing a comparable used vehicle. This flexibility, combined with lower monthly payments and access to newer models, makes leasing a worthwhile consideration for the right lifestyle.

A new car can be tempting, but if your current vehicle is safe and reliable, hanging on to it is usually the smarter financial choice. Take a look at how much you’ve spent on maintenance over the past year. If those costs are lower than what you’d pay each month for a new car, it likely makes more sense to stick with what you have. While a newer car might offer better fuel efficiency, make sure the potential savings at the pump actually outweigh the cost of a new vehicle.

It’s also worth asking yourself why you want a new car. If it’s mostly about convenience or modern features, take the time to weigh the benefits against the long-term costs. A new car is a major financial commitment, and it's important to be realistic about what you can afford. And if you’re planning to sell or trade in your current car, be prepared for its value to be lower than expected—though it may still help reduce the overall cost of upgrading.

If you’ve weighed the options and decided a new car is right for you, calculate your expected monthly payments to help determine which make and model to buy. The purchase price is just one of many factors that contribute to your total out-of-pocket cost. Interest rates are also important to consider. The interest rate on your car loan depends on a number of variables, including current national rates and your credit history. A higher credit score and longer history can help you qualify for a better rate. The average credit score for new car financing in 2022 was 738, while the average score for used car financing was 678, according to Experian.

If you are already a BancFirst customer, you can access your credit information for free and learn more about how your credit score and can impact your interest rates when you log in to online or mobile banking through Credit Monitoring by SavvyMoney!

If you are not currently a BancFirst customer, you can also access your credit information for free through Turbo, Credit Karma and similar services. You can also receive a free credit report once a year through annualcreditreport.com, which won’t harm your credit score. Credit bureaus such as TransUnion, Experian and Equifax provide free weekly credit reports as well.

If you have weighed your options and are in the market for a car and a car loan, BancFirst can help you navigate this process. Contact us today or visit us at an Oklahoma branch to get started.