If you instead buy a one- to three-year-old vehicle, you let somebody else "pay" that depreciation.
If you're uncomfortable buying used, perhaps it would ease your mind to buy a used vehicle that is certified by the manufacturer.
"I'm a big fan of certified used vehicles, especially leased cars that have just come back to the lot," said Farnoosh Torabi, personal finance expert and host of Financially Fit on Yahoo.
Don't lease. If you leased a car because you couldn't afford payments, your automobile tastes might be outpacing your wallet. Generally, financial experts frown on serial leasing for most people because they are continually paying for only the most expensive part of a car's life, the first few years.
Vehicle values should be less than half your income. The total current value of all your cars — plus boats, motorcycles and snowmobiles, etc. — should be less than half of your gross annual household income, according to another Ramsey rule of thumb. That's regardless of whether you own the vehicle or continue to make payments. Find the current value of vehicles at such Web sites as Kelley Blue Book (kbb.com).
The idea is you need to limit the amount of money you have tied up in depreciating assets.
Pay cash. Paying cash for a new vehicle seems absurd in households that don't have an extra 30 grand stashed away. But it's not as crazy as it sounds. First, recall that not everybody buys new cars. So, maybe the purchase price is closer to $15,000. And most people have some value left in their existing vehicle that they can sell or trade in. If that's worth $5,000, the balance you need to come up with is $10,000.
One long-term trick is to continue making car payments to yourself — perhaps in a separate bank account — long after you stop sending in auto payments to your lender. If your payment was $400 per month, it would take only about two years to build up $10,000 to pay cash for your next vehicle.
Drive until the wheels fall off. Not to be taken literally, this hints at the wisdom of keeping a vehicle a long time, say, more than 10 years. Indeed, even the depreciation hit you asborb in buying a new car softens if you keep a vehicle a long time. The average age of a car on the road today is 11 years, Gutierrez said.
Remember that car repairs are typically cheaper than car payments, Cunningham says. Another rule of thumb: If an auto repair costs less than half of the trade-in value, repair it. Otherwise, considering selling your vehicle and buying another.
Perhaps the best advice is realizing the importance of car affordability in your financial life.
"Shop with your head, not your heart," Cunningham said. "Since car loans last longer than some marriages, you'll want to approach this love affair in responsible manner."