Saving & Spending Home & Auto

9 Common Things Retirees Often Overlook When Buying a New Car

You need to consider more than just the vehicle's price to maintain healthy finances.

By Chris Adam

Edited by Calista Headrick

Updated Nov. 20, 2025

For some, retirement means finding a great new car to take on exciting, new adventures. But one of the smartest money moves for car owners at any age is making sure you take into account more than just the price of the vehicle.

If you've entered your golden years and are heading to the dealership anytime soon, here's a look at 10 things you shouldn't overlook to avoid trouble down the road.

Underestimating the long-term costs of ownership

When buying a new car, it's easy to overlook the long-term costs associated with owning that vehicle. For example, factors such as fuel economy, insurance, depreciation, and maintenance may not be top of mind when considering all the available options.

While it can be easy to focus just on the price of the car, additional costs of ownership can quickly add up each year. In fact, between upfront costs for insurance, gas, and maintenance, the average cost of owning a car is about $1,025 per month, according to AAA. That adds up to more than $12,000 a year. If you're on a limited income, these costs can definitely be a source of pain.

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Falling for pressure to buy unnecessary add-ons

Many shoppers already consider buying a new car at a dealership a high-pressure experience. You may have just gone into the store to look, and yet it feels like you've gone from searching to contract in just a few minutes.

If you're a retiree, pay special attention when the salesperson starts talking about add-ons. After all, extended warranties, paint protection, and expensive technology packages can quickly add hundreds or thousands of dollars to your bill, and you may not truly need them.

Along with asking questions, it can be helpful to have someone go along with you to help avoid being pressured into purchasing add-ons that aren't really necessary.

Forgetting accessibility and comfort features

While it's great to have an attractive ride in a color you like, it's not going to be fun to drive a vehicle that just doesn't meet your accessibility or comfort needs.

For example, take aspects such as seat height, visibility, ease of entry and exit, and control layout into account. If you're shopping for a vehicle online, you can search for cars that fit your specific needs.

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Choosing a vehicle that's larger or more complex than needed

While you may appreciate having the newest technology and controls in your vehicle, be careful when looking for your next vehicle. For instance, some SUVs and trucks can be harder to handle or maintain than expected, which can be difficult to navigate at an older age.

Be sure to ask questions and thoroughly examine the vehicle's complexity before making a purchase.

Neglecting to compare financing options and incentives

One part of the car-buying process that can be especially frustrating for retirees is the financing discussion. While some car manufacturers offer discounts to retirees, dealerships may not always mention them. Be sure to proactively ask about any special discounts, offers, or financing deals to ensure you receive all potential savings.

Not understanding financing vs. leasing

One financial consideration that you don't want to overlook as a retiree buying a new car is the difference between leasing and financing a vehicle. While leasing can often mean lower monthly payments, it also generally comes with mileage restrictions and fees.

Keep this in mind if you plan on doing a lot of long-distance traveling in retirement. You can get pre-approved for a loan, which allows you to set your budget ahead of time.

Don't Miss: 7 warning signs you're paying too much for car insurance.

Neglecting to consider alternative options

A new, shiny vehicle sounds exciting, but there may be other options to consider besides buying a new car. For instance, think about a certified pre-owned vehicle for your next purchase. They can be extremely reliable and a great alternative to a new car. Additionally, they can be significantly cheaper and help reduce transportation costs for retirees on a fixed income.

Failing to consider reviews and ratings

If you're not the type to do your research and look through reviews and ratings, it may be time to switch up that approach when buying your next car. Even if it's as simple as browsing a few ratings or reviews, the time can definitely be well spent.

After all, some reviewers may warn you that a few years down the road, they started having some specific troubles with the vehicle you're looking to buy. Check out sites like Edmunds or Consumer Reports to get a better idea of how the car you're interested in stacks up against others.

Overlooking tax implications

You'll want to be cautious about the source of the money for your new car. For example, as a retiree, you need to think about the implications of withdrawing funds from a pre-tax retirement account to help finance your new vehicle.

You may also want to think about any potential tax benefits, such as the deduction of interest paid on a qualifying new car loan.

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Bottom line

Buying a car as a retiree can mean finding a great vehicle that fits your needs now and in the years to come. You want to avoid overlooking things such as long-term costs and financing options that could impact your budget down the road. Not only should you ask about special pricing for retirees at the dealership, but also inquire with your agent to potentially save on car insurance.

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