Suze Orman’s 14 Best Car-Buying Tips to Keep You Out of Financial Trouble

Suze Orman, a renowned personal finance expert, has dedicated her career to guiding individuals toward financial security and giving people solid money advice, so she's someone many people turn to when looking for financial help.

Buying a car is often one of the most significant financial decisions, so her expertise and experience are considered particularly valuable by some. 

If you're in the market for a new car, you may be interested in finding out what Orman has to say about the process, including how you can avoid costly mistakes and make informed choices by following 14 of her top tips.

The longer the loan, the longer you pay interest on it, which can add up quickly. Orman recommends opting for a loan term of no more than 36 months. 

You might think that the lower monthly payment of a longer loan is better, but when you add up all the additional money you lose in interest payments, she says it's a bad deal.


Given the lower monthly payments and other special offers, you might be tempted to lease a car, but that's something Orman says you'll want to avoid doing.

Since you don't own the car, your payments aren't going towards helping you to build any equity. Not only does that leave you throwing your money into the void, but you also have to return the car at the end of the lease term.

According to Orman, buying a newer used car is a great deal. New cars undergo major depreciation once they're driven off the lot, so a 3-year-old car can be purchased for a significant discount.

Doing this may allow you to get a better value for a car that's still fairly new.


It can be tempting to roll over your car loan onto a new vehicle, but it's best to avoid that practice, since rolling over your loan will increase your debt burden, causing you to pay more interest over the long run.

If you owe more on your current car than it's worth, Orman says you could be better off by eating the payments and getting free and clear of the loan instead.

When purchasing a car, figure out what you need, not what you want. Luxury features are nice but dramatically inflate the price tag, so write down a list of essentials you must have.

Once you have those down, you can look for a car that fits your needs. Doing so can keep you from overspending and help your long-term financial outlook, according to the finance guru. 


While buying that fancy luxury car might feel good in the moment, consider where that extra money could go if you decided not to splurge.

Instead of spending that extra $10,000 on a nicer car, that cash could be invested elsewhere. Over the life of the car you could see a significant growth in your investments, instead of sinking it into a depreciating asset like a car.

It's good to have robust financial health with a high credit score. The higher your score is, the more trustworthy you are to lenders, which will prompt them to give you a lower interest rate on your loan.

Keeping your overall debt low, never missing a payment, and not making too many new credit card applications can all be good ways to boost your score.

Do your due diligence when determining your car loan options. Relying solely on the dealership is a recipe for getting ripped off.

Instead, Orman says you should look at other options from banks, credit unions, and other financial institutions to get the best deal possible. Have your loan options figured out before you step on the lot, and you'll be in a much better position.

By paying upfront with a larger amount of cash, you're lowering the overall monthly payments and interest.

While it might be hard to part with so much capital, consider the amount you will save over the length of the loan. With a bigger down payment, your monthly payments and interest are significantly lower, giving you a better outcome.

Purchasing a car is such an important decision that you should take your time doing research and comparing different models and prices. Avoid buying the first shiny new car you see on the lot, and have a plan in mind for what you're looking for.

Car salespeople will always try to upsell you on a pricer option, so researching beforehand and knowing what you want is crucial to saving you money.

There are trade offs to consider when making a vehicle purchase. You will have differing ownership costs depending on the make, model, and year. Maintenance, fuel costs, and insurance rates all vary widely.

These are all things to consider when looking for a new car, so ensure you have a rough estimate of your monthly costs before purchasing.

Car dealerships love to offer extra add-ons like extended warranties and car accessories because it's easy money for them. If you agree to additional costs once you've committed to a large purchase, Orman says you should avoid that temptation to roll in that extra cost onto your car loan.

If you decide to purchase additional warranties or add-ons, she says you should pay for them separately instead.

Avoid paying too much attention to that slick-talking salesperson on the showroom floor because they're not actually your friend, and any advice they give you is geared towards spending more money on a car.

Most salespeople earn their wage based on commission on the sale, so Orman says they're incentivized to upsell you on everything possible, whether you need it or not.

Brand-new cars lose value the second you drive them off the lot — once you leave the lot and hit the road, your car loses approximately 10% of its value — so you'll want to consider that when weighing your options..

Even a slightly used car is significantly cheaper than the newest model. Many dealerships offer certified pre-owned cars, so don't feel tempted to just look at the newest models when you're on the lot.

By following these tips from Suze Orman, you can make a car purchase that aligns with your financial goals and avoids those common pitfalls that can leave you under a mountain of interest payments. 

If you have your car situation squared away, you can use the extra money you have to get out of debt.

Buying a new car is not a decision to be taken lightly, and your future self may thank you for considering some of these tips from Orman before your next trip to the car lot.