Here’s a sobering stat: New cars are so expensive these days that 19% of buyers are signing up for a monthly loan payment of at least $1,000. That’s up from just 4.3% in 2019.

What’s more, those who can’t afford such a big bill are increasingly turning to longer-term loans, borrowing for up to seven years instead of the more typical three to five.

In fact, because the average new car now costs over $49,000 — about $10,500 more than it did five years ago — a record share of car shoppers (22%) opted for seven-year auto loans in the second quarter, according to the latest data from Edmunds, the online car shopping guide. And even then, the average monthly payment for a new car was $756.

So what? Fall is a popular time to buy a car because dealerships often offer deals to make room for the following year’s models. And if you’re in the market, you too may need a lengthier loan to give your monthly budget more breathing room. But there are downsides to borrowing for longer that you’ll want to be aware of.

First, the most basic reason: While longer loans cut your monthly payment, they increase your total cost of borrowing, especially now that interest rates for new car purchases are averaging over 7%. If you borrowed $40,000 at 7.2%, you’d pay $11,040 in interest over seven years, rather than $7,749 over five years or $4,594 over three years.

Second, the risk of becoming “underwater” on your loan is higher with lengthier loans — and is already a growing problem. In other words, if you sell or trade-in your car before the term of your loan is up (to make room for a new baby, for instance), you could wind up owing more money than the car is worth. This is because like most mortgages, auto loans are typically amortized, meaning a bigger share of your fixed payment is interest in the beginning and you build equity slowly.

All that said, there are several ways to cut down on interest or offset your costs if you do go the lengthier-loan route. Here’s what you’ll want to consider:

•  Your timing. Tariffs haven’t led to any major price increases on cars… yet. Automakers and dealers have absorbed much of the tariff impact, but that may not last much longer, according to Kelley Blue Book. In the meantime, if the Fed cuts its benchmark interest rate this week, it could bring interest rates down a smidge.

•  Buying an American-made car. Eligible taxpayers can now get a federal tax deduction of up to $10,000 a year on auto loan interest. A provision of the Big Beautiful Bill Act passed earlier this year, this applies to loans taken out between 2025 and 2028 on new American-made cars. It even applies if you don’t itemize your deductions – as long as you meet the income and other eligibility requirements. (A tax deduction doesn’t typically have as much impact as a tax credit, but it does lower your taxable income and in turn, your tax burden.)

•  Buying used versus new. This is a double-edged sword. Used cars are cheaper – averaging about $25,500, according to July data from Kelley Blue Book. But interest rates for used cars are generally higher than they are for new cars, and used cars typically have higher maintenance costs. Plus, right now used cars are in relatively short supply, making the value proposition more complicated. To explore your options, use this SoFi calculator to see how your payments would change under different scenarios.

•  Changing your payment schedule: If you make payments every two weeks rather than once a month, you’ll make 13 rather than 12 payments in a year, shortening your payoff time by one month every year and saving you some interest.

•  Paying extra when you can. If you get an annual bonus from work or a tax refund every spring, consider throwing some of it toward your auto loan to accelerate your payoff. As long as there’s no prepayment penalty, this is a flexible way to nibble a little extra off your balance.

•  Maximizing your trade-in value. If you’re trading in your current vehicle, don’t assume every dealer will make you the same offer. Because of the relatively low inventory of used cars, some dealers may be more competitive than others if they’re in need of your vehicle type. Some of it depends on your negotiating skills, too.

Related Readings

Buying a Car in 2025: There’s More to It Than Tariffs (SoFi)

Take Control of Your Auto Loan (Consumer Financial Protection Bureau)

How to Buy a New Car in Today’s Challenging Market (Consumer Reports)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM20250915SW

Are you thinking that it might be worth waiting to sell your home?

With homes sitting on the market longer and prices starting to fall, more homeowners are becoming discouraged about their prospects for a successful sale. A growing number are delisting their properties, presumably holding out for a more favorable market.

Of course, delaying a sale doesn’t make sense if a shorter commute or room for a growing family is more important to you than maximizing your profits. And while the Federal Reserve is expected to resume interest rate cuts, there’s no guarantee you’d be better off waiting. If and when mortgage rates drop, it would have to be enough to draw out more buyers and higher offers.

But if you do decide to stay put — at least temporarily — you don’t have to just make do. Here are five ways to get the most out of your current home in the meantime.

1. Make your house more livable. If you have the means, key repairs or renovations may not only make you more comfortable, but boost the value of your home once you’re ready to sell. Choose projects that either have a high return on investment (like replacing a garage door or installing a new oven range and sink) or that will dramatically improve your quality of life. A home equity loan or line of credit (SoFi has both) can help cover the costs.

2. Turn your unused space into a side hustle. There’s nothing like earning some extra income to make delaying your move more bearable, especially if it’s low lift. Rent extra bedrooms to roommates or turn a garage or shed into an Airbnb rental. Or get creative by transforming a basement into something like a podcast studio.

3. Move anyway – and rent your home out for a while. If you can’t hold off on moving, consider whether it makes sense to rent your house out instead of selling it. Just be prepared for landlord duties, including screening tenants and abiding by local regulations and insurance requirements. If you move to a rental that costs less than your mortgage, you might even be able to pocket the difference.

4. Stage your space. Getting your house ready for a sale can make you feel less anxious and more prepared when the time is right. And it doesn’t have to cost a fortune. Get any necessary repairs out of the way or look to boost your curb appeal. (A fresh coat of paint or flowers in the front yard go a long way.) Even just decluttering and depersonalizing (think: adding shelves or storage furniture) can brighten your outlook while you’re living there and improve your chances of impressing potential buyers down the road.

5. Save aggressively. You can’t control mortgage rates or buyer demand. But you can put yourself in a stronger financial position when you decide to sell. Use the desire to make a fresh start in a new home as motivation to save your money or pay down debt so you’ve got a stronger financial footing when you make your next purchase. Creating a budget, opening a high-yield savings account, or “paying yourself first” are great ways to help jumpstart this effort.

SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.

All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.

You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 09/12/25.

In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM2025091501