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Buying a car with your spouse

Updated: Jan 4

Updated post: 9/5/23

Original post: 8/21/22

How to Budget When Your Spouse Won't: Part 6 of our 10 part budgeting series

Table of contents

The value of a vehicle

From a financial perspective, the only real value of a vehicle is to get from point A to B. The best financial decision is to buy the most cost-effective vehicle to accomplish this and avoid considering values and preferences. Even billionaires like Warren Buffett still drive cheap(ish) cars.

My parents drove junk cars as a trade-off to pay for my college education. They prioritized their values in making that decision, and my college education was a greater priority for them than a nice car. This is a gift we are repaying to our children and the greatest gift my parents gave me.

However, values and preferences vary from one person to the next. When the values of spouses are not aligned, it can make decisions such as purchasing a vehicle even more complicated.

There are certainly more potential complications. Consider reading or revising our first post in this series that focuses on strategies to work with your spouse when discussing emotional and potentially contentious money decisions.

Are cars assets?

Since cars typically lose value over time and require ongoing expenses such as insurance, maintenance, and fuel, I do not consider cars assets. While a car may provide transportation and convenience, it does not generate income or appreciate in value like other assets such as stocks or real estate. In fact, a car is often viewed as a liability because it requires ongoing expenses and can be a source of debt if financed.

Additionally, a car's value can depreciate rapidly, particularly in the early years of ownership.

Which cars depreciate the least?

If you or your partner have decided to purchase a new vehicle, you have decided to buy something worth 10% less within 10 seconds of driving it off the lot.

There are several reasons vehicles depreciate so significantly.

  • Life of the vehicle. Vehicles only have a certain amount of miles they can run.

  • Supply and demand. A segment of the population will only buy a new vehicle, so as soon as a vehicle is driven off the lot, the demand for that vehicle instantly declines more substantially than the supply.

  • Newer models. When you buy a new vehicle, the new and improved next model of your vehicle is only months away from being released.

Depreciation does create a substantial buying opportunity in the pre-owned vehicle market.

The Car Edge Car Depreciation Calculator allows you to see the expected resale value of over 300 models for the next decade. (Note - their website included commercials)

Which cars last the longest?

According to Consumer Reports, these five cars commonly go over 200,000 miles:

  1. Toyota Camry

  2. Honda Accord

  3. Toyota Prius

  4. Honda CR-V

  5. Toyota Sienna


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Gas vs. electric cars: comparing the energy costs

Significant but temporary spikes in gas prices have occurred since the 1970s, and they'll probably continue to happen. Meanwhile, the cost of electric cars has continued to become affordable for more of us, which shields us from high gas prices.

Buying a car with a spouse
Real price of gasoline per mile driven

As you can see, the linked calculator below allows you and your spouse to determine the cost savings of purchasing a specific electric car compared to buying a gas-powered one. You can specify the cost savings based on current gas and electricity prices.

Tax credits

Think of a tax credit as cash from the government. They reduce the taxes you owe, dollar for dollar. As you can see here, there are different types and eligibility requirements for tax credits with various benefits. Some tax credits are fully refundable, which means they can be received as a government transfer that exceeds the tax liability.

You can use the linked U.S. Department of Energy Fuel Economy page below to uncover which tax credits are currently available for all of the electric vehicles in the market.

The cost of borrowing

In my opinion, you should consider paying cash for a car. For some, that is not an option, and others would prefer investing dollars that could be applied to purchase the car in cash if the loan's interest rate is low enough.

As you can see, people can afford a higher-priced car by extending the term (length) of the loan. This has been the trend over the last decade. Doing this increases the overall cost of borrowing to purchase the vehicle. The total cost of borrowing is higher when:

  • The loan term is longer

  • The down payment is smaller

  • The APR is higher

Buying a car with your spouse

There is a real risk that a vehicle will be underwater when taking a long-term vehicle loan. This means that you owe the lender more than the vehicle is worth. You can figure this out pretty quickly by looking at the value of your vehicle at Kelley Blue Book and Edmunds and then checking with your lender to see how much you still owe. If you owe more than the car is worth, you are underwater. If this is the case with you, consider purchasing gap insurance only to cover the cost of depreciation.

How not to pay the sticker price

The Consumer Reports article How to Negotiate a New-Car Price Effectively is full of great ideas. I added a few tips to some of my favorite recommendations:

  • Bargain from your positions of strength.

    • Figure out what the dealer paid for the vehicle. Ask for the invoice price.

    • Have competing bids in hand from other local dealerships or car-buying websites.

  • You have carefully researched the vehicle you want and have already taken a test drive.

  • You have already calculated what you are prepared to pay. Reassure the salesperson that your offer includes a fair profit.

Also, consider these tips:

Separate the deal

Do not lump the price of the vehicle in the negotiation process, the price they would give you for a trade-in, and the terms of the loan.

  • Use the aforementioned strategies to drive down the sticker price for the vehicle. If you're willing, you might be able to get more in the private market.

  • Look at used car marketplaces and dealerships to benchmark what you can get for your

  • Call local lenders such as banks and credit unions to gather loan quotes before test-driving vehicles.

Taxes and fees

  • The taxes paid on a vehicle can vary greatly depending on your state. Click here to explore the sales tax in each state.

  • Some of the fees tacked on to the cost of the vehicle can be negotiated. Vehicle registration fees can vary by state.


  • The service and parts department are the most profitable of the dealerships' gross profits, accounting for 49.6% of the dealership's gross profits.

  • As you can see below, Triple AAA has an impressive car estimate calculator that allows you to estimate the part-by-part cost of different vehicles.

Buying a car with your spouse

Calculating the true cost of ownership

"The Edmunds Inc. True Cost to Own® (TCO®) pricing system calculates the additional costs you may not have included when considering your next vehicle purchase. These extra costs include depreciation, interest on your loan, taxes, and fees, insurance premiums, fuel costs, maintenance, and repairs.

The TRO calculator is one of my favorite tools to use to understand the complete financial obligations that accompany purchasing a vehicle.

How to partner with your spouse to negotiate a better deal

Many of our financial choices originate from irrational behavior. The consequences of impulsive financial choices for items less than $100 can usually be managed. However, making an emotional decision to purchase something as significant as a vehicle can be a mistake you pay for every month until the vehicle is sold or paid off.

Here is how you can work with your partner to prioritize establishing safeguards to prevent an impulsive decision. Here is one strategy to consider.

Buying a car with your spouse


When you plan a budget with your spouse, you are not budgeting with Excel or other tools such as our Budget Template for Couples. You are using these tools. You are budgeting with someone you love and share your life with.

Our free Budget Template for Couples is designed specifically for couples. Each category includes linked graphic-centric short videos to help couples in the budgeting process, providing essential prompts to consider budgeting each categorically appropriately.

This 10-part series is dedicated to helping you work with a spouse to budget together and provide the information you need to make educated decisions with your dollars.


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