Buying a car is much easier when you understand what the numbers actually represent. Edmunds helps shoppers compare vehicles, estimate fair market prices, and evaluate long-term ownership costs before visiting a dealership. Instead of relying solely on advertised prices, buyers can use the platform to make informed decisions based on current market conditions.
One of Edmunds' most valuable features is its Edmunds Suggested Price, formerly known as Edmunds True Market Value (TMV). This pricing estimate is based on weekly transaction data from approximately 5,000 dealerships, representing about 25 percent of U.S. dealerships. Rather than reflecting a dealer's asking price, it estimates what buyers are actually paying for similar vehicles in their local market.
Start With a Budget, Not a Monthly Payment
Many buyers shop based on the monthly payment rather than the vehicle's total cost. While that may lower the payment, it often means a longer loan and higher interest costs. Start by deciding how much you can realistically spend on the vehicle before considering financing.
A practical guideline is to keep new car payments below 15 percent of your monthly take-home pay. For used vehicles, loan payments should stay around 10 percent, while total ownership costs, including fuel and insurance, should remain below 20 percent. Fuel and insurance alone typically account for about 7 percent of take-home income.
Those limits matter even more in today's market. Through October 2025, the average monthly payment for a financed new vehicle reached $766, up 31 percent over five years. Average lease payments were $578 per month, while financed purchases averaged $740 per month. Setting a realistic budget before shopping helps narrow your options and reduces the risk of buying a vehicle you can't comfortably afford.
Research More Than the Vehicle
Two vehicles with similar prices can deliver very different ownership experiences once maintenance, fuel costs, and reliability are considered. When comparing vehicles, pay attention to:
Reliability
Safety ratings
Fuel economy
Cargo space
Technology features
Consumer reviews
Expert reviews
Another valuable resource is the True Cost of Ownership (TCO). Rather than focusing only on the purchase price, Edmunds estimates ownership expenses over five years while assuming 15,000 miles driven annually. The calculation includes depreciation, financing, insurance, maintenance, repairs, fuel, and taxes, giving buyers a clearer picture of what the vehicle is likely to cost after they leave the dealership.
Understand Edmunds Suggested Price
The Monroney sticker total MSRP is the manufacturer's suggested retail price displayed on every new vehicle. Although it serves as a useful reference point, it is not necessarily the amount buyers ultimately pay.
The invoice price is the amount billed by the manufacturer to the dealership. However, it should not be viewed as the dealer's actual cost because manufacturer incentives, rebates, and holdbacks are not reflected in that figure.
The Edmunds Suggested Price, also known as Edmunds True Market Value (TMV), provides a more realistic benchmark. It estimates the average transaction price paid by buyers in your local market using recent sales data. Comparing dealer offers against this figure helps determine whether an asking price is competitive before negotiations begin.
Choose Financing Before Visiting the Dealership
Securing a preapproved car loan before visiting a dealership gives you a stronger negotiating position. It provides a financing benchmark, allowing you to compare the dealer's offer while keeping the discussion focused on the vehicle's price instead of the monthly payment.
Financing costs remain significantly higher than they were a few years ago. The average APR for financed new vehicles reached 6.9 percent in late 2025, up from 4.7 percent in 2020. Used vehicle loans averaged 10.8 percent. Loan length is equally important.
Although 72-month loans accounted for 36.1 percent of new vehicle financing in 2025, limiting your loan to 60 months or less can reduce interest costs and lower the risk of negative equity.
Compare Listings Carefully
Looking at several listings makes it easier to recognize a fair deal. Rather than focusing on one vehicle, compare models with similar mileage, trim levels, condition, options, and vehicle history. Small differences in these areas can have a significant impact on long-term ownership costs.
Trim levels also deserve careful consideration. Buyers spend an average of $11,500 more when moving above the base model, increasing the purchase price by roughly 33 percent. Premium trims often include desirable features, but it is worth considering whether those upgrades provide enough value to justify the additional expense.
Request the Out-the-Door Price
The advertised selling price rarely reflects the amount you'll actually pay. Instead of comparing sticker prices, request the complete Out-the-Door Price (OTD), which includes the vehicle price, taxes, registration, dealer fees, and documentation charges.
Documentation fees vary considerably by state. Median fees reach $899 in Florida and Virginia, average approximately $85 in California, and are capped at around $75 in New York. Comparing the full purchase price instead of the advertised price makes it much easier to evaluate competing offers from different dealerships.
Inspect Used Cars Before Buying
Following proper used car buying steps means verifying a vehicle's condition before completing the purchase. A clean appearance or a short test drive cannot reveal every potential issue.
Every used vehicle should receive both a vehicle history report and a pre-purchase inspection by an independent mechanic. A professional inspection generally costs between $100 and $200, takes about one hour, and can uncover hidden mechanical problems, previous collision damage, or excessive wear before you commit to the purchase.
If you're deciding between buying from a private seller and purchasing from a dealership, consider whether a Certified Pre-Owned (CPO) warranty justifies the additional cost. For many buyers, the manufacturer inspection process and added warranty coverage provide greater peace of mind.
Be Careful in the F&I Office
The finance and insurance office is where dealerships often generate substantial additional revenue through optional products and services. Customers spent an average of $1,367 on F&I office products during one year studied, contributing roughly $2.4 million in annual F&I revenue per dealership.
Before agreeing to optional products, ask what they include, whether they are necessary, and whether similar products can be purchased elsewhere at a lower cost.
Common examples include:
Nitrogen tire fill for $100 or more
Fabric protection for approximately $195, compared with about $9 for a retail fabric protector
Window tint packages costing around $395, while independent shops typically charge about $145
Paint protection packages priced around $495
Cosmetic pinstriping for $279, despite independent installation often costing $50 to $100
Learning how to negotiate dealer-installed options and add-ons can reduce the final purchase price without affecting the vehicle's reliability or performance.
Avoid Common Buying Mistakes
Many expensive mistakes happen before the paperwork is signed. Shopping only by monthly payment, ignoring True Cost to Own (TCO), comparing vehicles solely by MSRP, accepting every dealer add-on, choosing an excessively long loan, or skipping an independent inspection can all increase the total cost of ownership.
Depreciation is another important factor to consider. On average, a new vehicle loses about 30.5 percent of its value during the first year. Comparing new, used, and Certified Pre-Owned models, rather than assuming a new vehicle always offers the best value, can lead to a more informed purchasing decision.
Shipping Your Vehicle After Purchase
If you purchase a vehicle outside your local area, professional auto transport can save time and eliminate unnecessary mileage.
AmeriFreight Auto Transport connects customers with vetted carriers for open and enclosed vehicle shipping. Door-to-Door Service (Location Permitting) is available in many areas. No upfront payment until you choose a carrier. Because shipping costs vary based on distance, route, vehicle type, and seasonal demand, exact pricing is not available in advance.
Get your free, no-obligation quote today.
Disclaimer
This article is for informational purposes only. AmeriFreight Auto Transport is not affiliated with, endorsed by, or sponsored by Edmunds or CarMax. Pricing, financing rates, fees, and vehicle market data are subject to change. Always verify current information with Edmunds, lenders, dealerships, and applicable government agencies before making a purchase decision.
