06.23.25 Housing Market Update / New Considerations for A Vehicle Purchase

Summary

The Clark Howard Podcast: Housing Market Update & New Considerations for Vehicle Purchases (06.23.25)

Release Date: June 23, 2025

Clark Howard returns with insightful discussions on the current housing and vehicle markets, addressing the challenges consumers face and providing actionable advice through listener questions. This episode delves into the shifting dynamics of the housing market, the turbulence in the vehicle industry, and offers guidance for making informed financial decisions in these sectors.

---

Housing Market Update

Clark Howard begins by examining the significant changes occurring in the housing market across the United States. He highlights that while certain regions like the Midwest and parts of New England continue to experience tight inventory, much of the rest of the country is witnessing a "frozen" housing market.

Key Points:

• Inventory Shortage: Economists estimate a shortage of 4 to 5 million housing units in the U.S., creating substantial challenges for potential buyers.

• Price Stagnation: After years of rapid price increases, home prices have largely plateaued. Only a few cities, such as Austin, Texas, have seen notable price declines.

• Regional Differences: While the Midwest and New England remain competitive with multiple offers on homes, other areas experience fewer bids, indicating a cooling off from the intense buying frenzy of previous years.

• Builder Incentives: In regions like the South and Southwest, builders are grappling with high unsold inventory. To attract buyers, they've introduced various financing deals, including subsidized loans to make homes more affordable.

Notable Quotes:

• "The housing market is in such an odd place right now because here we are short somewhere. Best estimates, they're really guesstimates by economists. They were short 4 to 5 million housing units in the US and that's enough to really be disruptive for buyers." – Clark Howard [00:53]

• "Builders of new homes... are offering a lot of deals right now. Number one on their list, they're offering subsidized financing on the home to turn the clock back several years, to give an interest rate that really makes a home more affordable by far than it would have been otherwise." – Clark Howard [06:53]

• "Frozen, frozen in much of the country. What's frozen mean? So you have sellers who have the house on the market at what was the price was maybe a year or two ago, but they have gotten their minds that their house is now worth what people were paying in a buying frenzy a year or two ago." – Clark Howard [07:02]

---

Listener Questions on Housing

1. Andrew from Iowa: Saving for a Down Payment

Question Overview: Andrew and his wife in their early twenties are looking to save for a down payment on a $250,000 house to avoid mortgage insurance. With a combined annual income of $75,000, they are concerned about the feasibility of saving $50,000.

Clark's Guidance:

• Prioritize Retirement Savings: Clark emphasizes the importance of continuing to contribute to a Roth IRA as a top priority, ensuring tax-free savings for the future.

• Alternative Mortgage Options: He suggests exploring flexible mortgage products like 80-10-10 or 80-15-5 loans, which allow for smaller down payments by combining primary and secondary mortgages.

• Government Programs: Mentions potential eligibility for FHA loans or specialized loans for rural areas through the Department of Agriculture.

Notable Quotes:

• "Roth is highest priority. You throw money into that Roth, you build up money tax free later..." – Clark Howard [08:16]

• "In markets where there's a lot of new home construction and that's where you got real power as a shopper, the used home market is frozen." – Clark Howard [07:38]

2. Nanette from Washington: Condo HOA Special Assessment

Question Overview: Nanette faces a $60,000 special assessment for major repairs in her condominium. She is torn between continuing to live in her current townhouse or selling it to avoid the assessment.

Clark's Guidance:

• Evaluate Financial Options: Clark advises considering a home equity line of credit (HELOC) to cover the special assessment, although it would come with higher interest rates.

• Lifestyle Considerations: He urges evaluating whether she can afford the increased monthly payments or if downsizing to a smaller rental is more viable.

• Market Impact: Suggests that special assessments might lower the selling price of her property, potentially offering financial relief if she chooses to sell.

Notable Quotes:

• "This is so ironic because last night I got stopped by somebody who just got hit with a hundred thousand dollars. Special assessment at the condo she's in." – Clark Howard [11:38]

• "Do you want to give up the lifestyle you have? Or if you keep the lifestyle you have, can you afford what would be that higher monthly payment?" – Clark Howard [14:10]

---

Vehicle Market Update

Clark shifts focus to the volatile vehicle market, discussing how recent tariffs have significantly impacted vehicle prices, especially for imported brands. He underscores the widening price gap between passenger cars and larger vehicles like SUVs and trucks due to shifting consumer preferences and manufacturing costs.

Key Points:

• Tariff Impact: Imported vehicles, particularly German brands like Mercedes and BMW, are experiencing substantial price hikes—$12,000 for Mercedes and $8,000 for BMW on average.

• Shifting Preferences: There's a notable consumer shift towards SUVs and pickup trucks, creating a significant price disparity compared to passenger cars.

• Affordability Concerns: The average cost of a new vehicle in the U.S. has risen to $48,000, though many options remain available below this threshold.

• Autonomous Vehicles: Clark speculates on the future with the advent of autonomous vehicles, suggesting a potential shift in vehicle ownership models.

Notable Quotes:

• "The car market is truly in turmoil right now. The tariffs that are being imposed on different consumers buying different brands are quite, quite large." – Clark Howard [18:49]

• "What you need to do is widen your funnel and rethink what you're interested in buying because... a new or used, the brand, the model, that's going to make a big difference in your life." – Clark Howard [23:00]

• "If you have a vehicle that's still in great shape, you know, we are now on the cusp of where we're moving to an era of autonomous vehicles, truly autonomous vehicles..." – Clark Howard [24:10]

---

Listener Questions on Vehicles

1. Jeffrey from Georgia: Construction Loan Payments

Question Overview: Jeffrey is building a new home and seeks the safest method to pay for construction loan draws. He inquires whether cashier's checks are safer than personal checks.

Clark's Guidance:

• Use Regular Checks: Clark affirms that regular checks are sufficient unless the contract specifies otherwise. He advises against mailing checks due to potential hassles and recommends handing them directly to the contractor.

Notable Quotes:

• "Don't mail checks anymore. Don't do it. The hassles that occur? Crazy. But in this case, handing a check to a contractor? Absolutely. Just fine." – Clark Howard [16:52]

2. Deirdre from North Carolina: Buying a Used SUV

Question Overview: Deirdre and her husband are planning to purchase a used medium-sized SUV without engaging in traditional dealerships. They seek advice on platforms like CarMax, Carvana, and Auto Direct.

Clark's Guidance:

• Non-Haggling Sellers: He highlights the growing market share of sellers who offer fixed prices without negotiation, providing guarantees like return periods.

• Market Timing: Advises waiting to purchase if possible, as recent panic buying influenced by tariffs has distorted the market. Suggests that allowing time may lead to better deals.

• Compare New vs. Used: Encourages comparing the cost of nearly new vehicles with used ones, as current market distortions may make new vehicles a better deal in some cases.

Notable Quotes:

• "The used vehicle market still has done the traditional way, what's called the grind where they're doing all the haggle with you..." – Clark Howard [24:38]

• "If you let some time move forward on the clock... there has been so much panic buying... you may find that the new will be an overall better purchase, better deal." – Clark Howard [27:12]

3. Jordan from Oklahoma: Purchasing a Sporty Used Car After an Accident

Question Overview: Jordan recently wrecked his car due to hydroplaning and is considering purchasing a sporty used car like a Mazda Miata or Subaru BRZ. He questions whether to buy a more expensive vehicle now or opt for a cheaper one and upgrade later.

Clark's Guidance:

• Insurance Considerations: Recommends checking insurance costs for desired models to ensure affordability.

• Financial Stability: Emphasizes the importance of maintaining savings and ensuring that vehicle expenses don't hinder financial stability.

• Long-Term Satisfaction: Suggests evaluating whether the higher-cost vehicle aligns with long-term financial goals and responsibilities.

Notable Quotes:

• "If you are saving a substantial amount of money automatically every month in a 401k... and you can still afford the vehicle, then you can consider buying one." – Clark Howard [28:00]

• "Make sure you're insurable at a price you're okay with, that you're saving money every month and that you still, after those two things, can afford the vehicle." – Clark Howard [28:10]

4. Susan from Georgia: Son-in-Law’s Bad Consumer Finance Deal on a Motorcycle

Question Overview: Susan is concerned about her future son-in-law, who secured a motorcycle loan with a high-interest rate without proper documentation. She seeks advice on how to handle his financial missteps before their upcoming marriage.

Clark's Guidance:

• Seek Credit Counseling: Urges her son-in-law to consult with a credit counselor to address his debt and financial management issues.

• Financial Responsibility: Stresses the importance of him taking responsibility for his debts to ensure a stable future for his growing family.

• Family Support: Advises Susan to support her daughter by encouraging her son-in-law to improve his financial habits, emphasizing patience and understanding.

Notable Quotes:

• "He needs to go to a credit counselor... find a legitimate credit counselor to talk all this through." – Clark Howard [30:05]

• "What we're about is you learning ways to save more, spend less and avoid getting ripped off. It's a process to get to where you live on less than what you make that you make smart financial decisions." – Clark Howard [30:30]

---

Conclusion

Clark Howard's comprehensive discussion offers valuable insights into navigating the current challenges in both the housing and vehicle markets. By addressing listener concerns with practical advice and highlighting key market trends, Clark empowers consumers to make informed financial decisions amidst economic uncertainties.

---

For more advice and information, listeners are encouraged to visit www.clark.com/askclark and engage with Team Clark through various platforms.

Transcript

[Sponsor Announcer]

This message is brought to you by Apple Card get 3% daily cash back when you buy an iPhone 16 with your Apple card at Apple Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and more at applecard.com @capella university you can learn at your own pace with our Flexpath learning format. Take one or two courses at a time and complete as many as you can in a 12 week billing session. With Flexpath you can finish the Bachelor's degree you started in 19 months and under $19,000. A different future is closer than you think with Capella University. Learn more at capella. Edu fast as 25% of students. Cost varies by pace. Transfer credits and other factors Fees apply.

[Clark Howard]

It's my pleasure to welcome you here to the Clark Howard Show. Our mission is to serve you with advice and information that empowers so you make better financial decisions in your life. I need to address changes going on in the housing market and I'm going to do that straight ahead. Things have definitely shifted in much of the country except parts of the Midwest and parts of New England. But everywhere else, big, big shift going on. And also I'm going to talk about the other big purchase we make in our lives. What you need to know. Keep in mind when you're buying a car and my advice may surprise you, but right now I want to talk about the frozen housing market. The housing market is in such an odd place right now because here we are short somewhere. Best estimates, they're really guesstimates by economists. They were short 4 to 5 million housing units in the US and that's enough to really be disruptive for buyers. And you think about a buyer and what's happened in the market in the last six years where prices, the actual purchase price of homes has escalated at unbelievable rate, particularly over 19 to 24. And now kind of just sitting there, home prices not really moving at all. Few cities have seen meaningful drops. Top of the list of that Austin, Texas. And the bigger they are, the harder they fall. Austin went through a faster escalation in home prices than really anywhere else in America outstrip people's ability to afford. And so Austin hit that peak and now prices have come down double digits in the rest of the country. We have a two part market and again I'm ignoring parts of the Midwest and New England where the inventory remains tight, buyers are still interested in buying. And I was reading a story about housing in New Jersey recently and in some of the communities in New Jersey near New York City there's still multiple offers on homes. They may be selling slightly more than the asking price. But here's the shift. Even in a strong northeastern market, where before a home going on the market might have gotten 20 offers, now it might be getting two or three. So even in really intensely strong markets, it's just strong, not intense everywhere else. Builders of new homes. When you look across the south and into the southwest in Texas, builders are sitting on almost unprecedented levels of unsold inventory of new homes. So builders of new homes are offering a lot of deals right now. Number one on their list, they're offering subsidized financing on the home to turn the clock back several years, to give an interest rate that really makes a home more affordable by far than it would have been otherwise. I want to tell you, these loan offers from new home builders come two types. One is a temporary buy down. That's a gimmick, where the builder puts a little bit of money in with a loan provider and you get a cheap loan for typically three years. And I call that a gimmick. What really matters is when a builder buys down the rate on that loan at a higher cost. So you have a great deal on that loan all 30 years. The power has shifted from seller to buyer in the new home market. In markets where there's a lot of new home construction and that's where you got real power as a shopper, the used home market is frozen. Frozen, frozen in much of the country. What's frozen mean? So you have sellers who have the house on the market at what the was price was maybe a year or two ago, but they have gotten their minds that their house is now worth what people were paying in a buying frenzy a year or two ago. Buyers, on the other hand, are facing mortgage rates around 7% less or more and much higher prices. They're like, can't do this. It's much cheaper to rent right now than it is to buy. We have not hit capitulation, even though buyers are saying, I'm not buying. Sellers have been reluctant to cut prices and there been higher percent of price cuts than we've seen in years. But we're still at the frozen point, which is price capitulation. And when we get to price capitulation, the market will come back alive on used homes. That's when a seller says, okay, obviously my home isn't worth what it was a year or two ago. It's worth less if I want to attract a buyer. And so we will hit capitulation because eventually a seller Goes from wants to sell to needs to sell. And that's when you get that marriage of price between what a buyer is able to pay and what a seller is willing to take. And we're not there yet.

[Caller]

All right, we'll go to some questions. This one's from Andrew in Iowa. My wife and I are in our early twenties. As is true for most people our age, home buying seems distant. We want to save up for a down payment, but don't have a clear timeline for when we'd be actually looking to buy. I believe to avoid mortgage insurance, we'd likely have to put 20% down on a pretty cheap house for $250,000. That's still $50,000. We only make about $75,000 combined per year.

[Clark Howard]

Can I, can I stop you for one second?

[Caller]

Sure.

[Clark Howard]

Even adjusted for inflation, this is an amazingly low thing. First home I ever bought, my down payment that was required of me was eighteen hundred dollars. Wow. Even if you take inflation into account, that might be $6,000 now.

[Caller]

Wow.

[Clark Howard]

And so when you hear somebody buying a home at the quarter million dollar mark, which the average price of a home in the United States I think is around 400,000. In order to avoid PMI the conventional way, you're looking at having to come up with $50,000. I mean, this is crazy.

[Caller]

And he says we only make about $75,000 combined per year. Saving up for this within a high yield savings account would take us a decade, give or take a few years based on our contribution rate. Saving up for this by investing in the stock market would expedite that a lot. But it may delay our plans even more if the market turns down at the wrong time. Another option I've considered is that Roth IRA contributions could be withdrawn without penalty. We've been diligent with our retirement savings, so this is a real potential source of funds. So would it be foolish to dip into that to help us a little to afford a valuable asset earlier in life? What's the best approach for lower middle class young people to work towards a down payment?

[Clark Howard]

So, Andrew, I love how you've thought through this whole question. I want to deal with it in little chunks. Roth is highest priority. You throw money into that Roth, you build up money tax free later, depending on your current circumstances at the time that it makes sense for you to buy a home, then we can have another discussion about whether you should withdraw some money from that Roth contributions tax and penalty free for down payment, or if you're better off doing something else, doing a smaller down payment. In the worst case, you take on PMI private mortgage insurance. But in many cases there are flexible products like 8010 tens where you take out a first mortgage for 80% of the amount of money you're borrowing, second mortgage for 10% and then you put 10% down. There are also 8015 fives where you do the same kind of thing and you have to do 5% down. There are things you'll be able to do when the time comes. You may even qualify for an FHA loan or living in Iowa. If you live in a rural area, you may be able to qualify for a, what's known as a farmer's loan. You don't have to be a farmer. You just have to live in a rural area where you qualify. If I remember right, those loans come indirectly through the Department of Agriculture. So there's a lot of possibilities. But right now, in this intermediate time, this intervening period, Roth is highest priority. You want to have some rainy day money, but the Roth is the highest priority to build up those tax free savings starting in your 20s.

[Caller]

And like, do you feel like they need to be in a rush to get a home at this early age?

[Clark Howard]

I mean, it's nice if you can buy a home in your twenties. How old were you when you bought your first home?

[Caller]

28.

[Clark Howard]

Okay. Today where you were able to buy a home in your 20s. Today, more likely people are buying a home early to mid-30s. Yeah, that's under today's conditions. And we don't know what conditions are going to be in the future. But right now the lack of affordability in the home market is an absolute frustration for anybody trying to buy a first home.

[Caller]

Sure.

[Clark Howard]

So now you do the best you can, which is live on less than what you make and put as much money as you can in that.

[Caller]

Roth Nanette in Washington says my condominium HOA has a special assessment of $60,000 from major repairs.

[Clark Howard]

Okay. Okay. That's crazy.

[Caller]

Yeah.

[Clark Howard]

This is so ironic because last night I got stopped by somebody when I was leaving a restaurant that had fear in her eyes because she just got hit with an a hundred thousand dollars.

[Caller]

Wow.

[Clark Howard]

Special assessment at the condo she's in.

[Caller]

That's insane. I have a mortgage with 2 1/2% loan with a balance of $110,000. My current total cost per year is $24,000. With the loan, home taxes, homeowners insurance and current HOA, $900 per month goes to the principal. Should I continue living in this house or sell to avoid the special assessment and Rent a smaller apartment to live. The annual rental expenses would be around $25,000 with no garage and only one bedroom. I currently have two bedrooms, two full baths. I'm a senior citizen and would love to continue living in this townhouse. Because of the green spaces for my daily hiking trails and having a garage to park my car, the prices have accelerated to $450,000 from $270,000 when I purchased the property eight years ago. Thank you for imparting so much general knowledge to the public. I love watching your show on YouTube while performing my daily exercises.

[Clark Howard]

Okay. I love that as a YouTube watcher. Our YouTube audiences keep growing and growing and growing. So 60,000 right now, you pay 2,000amonth all in. If you can do a home equity line of credit, it's going to carry a much higher rate than your two and a half. You're going to step up your payments by a decent amount, but you'll still be able to live where you love living. It's not comparable. When you talk about spending the same amount of money per year renting, no garage, one bedroom, you're going into a whole different kind of living thing.

[Caller]

So don't the buyer have to pay the assessment anyway so it might lower the selling price?

[Clark Howard]

Well, if they sell before the special assessment, it's something. People discount what they'll pay you.

[Caller]

Right? You have to.

[Clark Howard]

Knowing the special assessment is coming. When you start comparing relative value, I want you to look at places you can rent that are equivalent to what you have right now, that have the space you have, they have the garage you have, and look at what that would cost per year, because then you're comparing an equivalent. So if you were able to take out, if you needed to take out a home equity line of credit for the 60,000 special assessment, you would be having a higher cost per month, but it would probably be more likely equivalent to what you'd be paying for a similar kind of rental. Now that brings another question. Can you afford as a senior citizen a higher cost per month? If you can't, then we're talking about a whole different decision. If you think you can get 450,000 net of commissions, net of whatever you have to discount. Because a special assessment coming, let's say you net 400,000 and you owe 110, you're going to clear almost $300,000, which gives you the opportunity to have a lot more breathing room in your life. There is no automatic right answer here because the special assessments keep rolling in on condos. And this has been something that started in Florida after that condominium collapse several years ago and now has spread around the country with associations being required to do scheduled ongoing maintenance and repairs. So I'd love to hear back from you what you decide, but you've got to think through. Do you want to give up the lifestyle you have? Or if you keep the lifestyle you have, can you afford what would be that higher monthly payment?

[Caller]

Jeffrey in Georgia says, I'm building a new home. The construction loan allows a series of draws to be spent on various stages of construction. I'm wondering what the safest way to pay for a draw would be. Would a cashier's check be safer than a personal check? My understanding is that the draw has to be authorized ahead of time, and I'm thinking maybe a regular check would be safe enough.

[Clark Howard]

Regular checks, fine. The cashier's check would be a requirement if the builder required that. If the contract silent on it, you just hand them a check. Don't mail a check. You hand them a check at each straw. Gosh, I keep hearing more and more nightmare stories from people who mail checks. Don't mail checks anymore. Don't do it. The hassles that occur? Crazy. But in this case, handing a check to a contractor? Absolutely. Just fine. Coming up ahead, I want to talk about the things going on in the disruptions going on in the vehicle market. So many different things going on right now that make the path really hard to see clearly about buying or keeping what you have.

[Sponsor Announcer]

This podcast is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money. When you bundle your home and auto policies, the process only takes minutes and it could mean hundreds more in your pocket. Visit progressive.com after this episode to see if you could save Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states.

This message is brought to you by Apple Card. Each Apple product, like the iPhone 16, is thoughtfully designed by skilled designers. The titanium Apple Card is no different. It's laser etched, has no numbers and it earns you daily cash on everything you buy, including 3% back on everything at Apple. Apply for Apple Card on your iPhone in minutes, subject to credit approval. Apple Card is issued by Goldman Sachs Bank USA Salt Lake City Branch terms and [e-mail] we all have moments when we could have done better.

[Caller]

Like cutting your own hair.

[Sponsor Announcer]

Yikes.

[Caller]

Or forgetting sunscreen.

[Sponsor Announcer]

So now you look Like a tomato.

[Caller]

Ouch. Coulda done better.

[Sponsor Announcer]

Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education and human help when you need it.

[Caller]

Learn [e-mail].

[Sponsor Announcer]

This podcast is brought to you by Progressive Insurance. Do you ever find yourself playing the budgeting game? Shifting a little money here, a little there, just hoping it all works out well. With the name your price tool from Progressive, you can be a better budgeter and potentially lower your insurance bill too. You tell Progressive what you want to pay for car insurance and they'll help you find options within your budget. Try it [e-mail], progressive Casualty Insurance Company and affiliates. Price and coverage match limit limited by state law. Not available in all states.

[Clark Howard]

The car market is truly in turmoil right now. The tariffs that are being imposed on different consumers buying different brands are quite, quite large. There's a new report from Barron's that the average Mercedes is going to see a $12,000 increase in price as we move through summer. $12,000. That's the highest of any major brand. BMW, another German brand, eight grand average price increase. Other models much, much smaller increases. Ford looking at about $1500. GM $1900. Chrysler and Honda $1900. So this is not one size fits all. And it all depends on not just where a vehicle is manufactured, but where the parts for that vehicle are manufactured. So vehicles are going to be more expensive. And we go into this with the average cost of a new vehicle in the United States at $48,000. But overwhelmingly there's a lot of vehicles still available that are going to be cheaper than that. It is really something you think, oh, I have to spend so much. But you don't necessarily have to spend an enormous amount. The key and if you feel like I'm a broken record because I mentioned this about six weeks ago, but not everybody hears every podcast, sees every YouTube show. I want you to know there is a wide split now in the vehicle market. Pretty much whatever brand you're looking at, that if you buy a passenger car new or used versus an SUV or a pickup truck, that the price gap between passenger cars and SUVs and trucks is, as best I can tell looking at data, the largest gap it's ever been. And so you can buy a decent used car in the teens, you can buy a decent new car for a little less than 30,000. When you start looking at SUVs, you're looking many, many thousands more. Depending on the brand, maybe tens of thousands more. Why? Just plain simple consumer Behavior. Cars are out, SUVs and crossovers are in, pickup trucks are in. But even the pickup truck market has outrun the affordability of quotient that a lot of people can handle. Which is why the Maverick that is a Ford product has been selling like crazy. Because it's an alternative compact pickup truck for a fraction of the cost of an F150 or the Chevy equivalent or GMC equivalent or Dodge equivalent. So what's called your funnel, the vehicles you'll consider looking at, the brands you'll consider looking at. This is a case if money matters, you need to widen your funnel and rethink what you're interested in buying because again, new or used, the brand, as I shared with you a minute ago about the tariffs, the model, that's going to make a big difference in your life. Do you know that right now you can buy a new passenger car for less in many cases than a several year old used suv? It's your choice. You may not like driving a passenger car, but you know, the best of all, keep driving what you got. That's the best deal of all. And you know, if you have a vehicle that's still in great shape, you know, we are now on the cusp of where we're moving to an era of autonomous vehicles, truly autonomous vehicles, where you may not ever buy another vehicle. Eventually you may be in some kind of pool of people who have access to a fleet, autonomous ones. And I know there are people that are freaked out about that. I've been driving a vehicle that drives on the highway for me for the last eight years and I don't even know what to do anymore. Having to drive on a highway when I have a rental vehicle that doesn't drive itself. I'm so used to the car driving itself, this idea seems impossible. We're on the cusp of it being routine.

[Caller]

All right, got some car questions. This one's from Deirdre, North Carolina. My husband and I need to buy a car. We haven't purchased a vehicle since 2010. We are considering a used medium sized SUV. Think VW Atlas, Subaru, Ascent, Toyota Highlander, Acura, MDX. 3 years old or newer. And we'll begin looking soon. Will probably pay cash or pay with a combination of cash and a loan we would pay off quickly. What should we know about CarMax, Carvana, Auto Direct, etc. The idea of going to a car dealer just puts me off. Any help you could give us would be so welcome.

[Clark Howard]

So the market share is slowly moving to sellers that don't do haggle and provide some kind of return right for, for a refund for a period of time. And the overall used vehicle market still has done the traditional way, what's called the grind where they're doing all the haggle with you and saying they got to go talk to their manager and all that junk. Then the second you sign the papers, you own the vehicle. That's why there's more and more popularity with buyers buying from places that just tell you the price, no games, no gimmicks, and stand behind what you're purchasing with a right. If you get out there and you get on the road, you don't like it, you can bring it back usually for seven or 10 days or whatever and get your money back pretty much no questions asked. The thing that's complicated right now is with the inventory levels being what they are and people who are push their purchases forward. There's an advantage to waiting to buy a new for you used car or a new car looking in the fall rather than now because there's been so much panic buying by people trying to avoid the tariffs. I was just talking about that. It has created a situation where there's been at a lot of brands kind of like a fever pitch to buy. And the reality is if you let some time move forward on the clock, what's going to happen is people pull purchases forward and there's going to be a slump in the car market coming up in not that many months. So you're in the market for a vehicle now. If your vehicle you got back in 2010 is still behaving and you can wait a couple of months, I think you'll be rewarded in the market. When you're looking at something that's less than three years old, take time to compare the cost of a new version of whatever model versus a used historically. Think about over the years, I always said the opposite, right? But right now, distortions in the marketplace. When you're looking at one that's nearly new, you may find that the new will be an overall better purchase, better deal.

[Caller]

And Jordan in Oklahoma says I just wrecked my car after hydroplaning and losing control in heavy rain. I'm fine, I'm so sorry, but I.

[Clark Howard]

Well, that's the important thing.

[Caller]

So I need to buy a car. I want to buy a used car that's a bit sporty like a current generation Mazda Miata, Toyota GR86, Subaru BRZ, etc. Looks like I get get one for about 20 to 25 thousand dollars. But I just started a new job making plenty of money to afford it. And I don't know if it's a good idea to buy such a nice car when I don't have much in savings at the moment. My question is, should I buy a cheaper car now and plan to sell later or go ahead and buy a car I will be satisfied with long term?

[Clark Howard]

So Jordan, one thing. I want you to check with your insurer and see what it costs to insure any of the models you're interested in. You ever been in a brz?

[Caller]

I don't know what that is.

[Clark Howard]

Oh well, they're fine.

[Caller]

I know you used to have a Mazda Miata.

[Clark Howard]

I did. I had two different Miatas. Love the Miata. The BRZ is great. The GR86, I don't know what that is. Toyota. And they are fun cars that are considered to be affordable in the category they're in. So you say you make plenty of money to afford it but you don't know if it's a good idea? Here's how I would decide that. If you are saving a substantial amount of money automatically every month in a 401k, if you're offered one by your employer or a Roth IRA and you can still afford the vehicle, then you can consider buying one. Because the alternative is you had the wreck. Your insurer may not like you very much. The cost of insurance may be really significant and it may make more sense maybe that you do buy a much cheaper vehicle and bide your time till the accident falls off your insurance. You're then maybe in a financial position where it's even better as a time for you to buy a Miata or the Subaru or whatever that Toyota is. But I would make sure you're insurable at a price you're okay with, that you're saving money every month and that you still, after those two things, can afford the vehicle.

[Caller]

Susan in Georgia wrote him with this. My soon to be future son in law and father of our grandbaby got involved in a bad consumer finance deal on a motorcycle. They wanted to get married over Memorial Day but I told her she needs to wait and get his finances resolved. He bought a motorcycle from a dealer that has a BBB score of F. He was not given any loan docs at closing and now four months later they found out that he's paying 21% interest on the loan.

[Clark Howard]

Oh boy.

[Caller]

He sent me everything they gave him the day he bought it and there are no loan documents at all.

[Clark Howard]

Say what?

[Caller]

It's financed through this company I gave you the name of which is never heard of them. Which is not considered a predatory lender but has many of the same characteristics. He also owes a tool company for some tools he needed for a prior job. My advice was to file bankruptcy before they get married, but he is saying he will still owe on both Items. He is 25 years old, has a job that pays $20 an hour with no benefits. I don't believe he has any credit card debt. He is on a lease with our daughter. Help in all caps.

[Clark Howard]

What kind of lease?

[Caller]

I assume like a home or apartment lease, not car lease. Like they're living together, they have a baby.

[Clark Howard]

Susan, I know this is really really hard for you as a mom. Grandmom, I'm making an assumption from the way this is worded that you don't think that your potential future son in law is mature enough to be getting married to your daughter. And from a financial standpoint, obviously he's not showing real maturity. There's pretty good shot with the cost of this cycle, the the loan rate and the rest and the money he makes that the vehicle may be repossessed. This is bad ugly because he's not making enough money to afford raising a baby, being part of providing a household and handling the debts that they've got. We're moving into a school of hard knocks here. I don't know from what you wrote if the motorcycle is his source of transportation or if it's just a fun additional toy in his life. Obviously he's done everything wrong with this purchase. And I know you're like what's going to happen to my daughter? Being married to him, with her then feeling responsible for the debts. This is really, really hard. What I want him to do, this would be like a reverse dowry. I want him to go to meet with a credit counselor and the biggest thing they'll do for him is they'll get him thinking straight about obligations, cost of living, the expenses he's got versus his debts, in other words, having a realistic budget to live his life by. So hopefully you'll start making wiser choices with money. I don't know if he'll do it. You can't make an adult do this. But I think he needs to go to nfcc.org National foundation for Credit Counseling where he can find a legitimate credit counselor to talk all this through. But more important, talk about how he's handling money in his life and get recommendations from them how to handle how he's handling money and how he would handle this loan. I don't have a magic wand because it's going to require him to take proper financial responsibility in his life. You want him to be a good dad to your grandchild, and part of that is being financially sound. So I'd love to hear back from you later if he will do this, if he does it, and what results from it. You know, what do I say at the end of most podcasts and YouTube shows? I say what we're about is you learning ways to save more, spend less and avoid getting ripped off. And this question you asked fits all three of those at the same time. It's a process to get to where you live on less than what you make that you make smart financial decisions. And so that's what we're devoted to here with not just the podcast and YouTube show, but our websites, our newsletters, everything we're about is about giving you information that you can act on to take more control in your own life. And I know it's hard as it would be mother in law, but as best you can, be patient with this guy. And in this case, I'm asking you to give advice he did not seek, but I think it's where he needs to go and what he needs to do. And I hope you have a great rest of your day and I look forward to being with you on Wednesday.