AUSTIN (KXAN) -- The Federal Reserve recently dropped the interest rate by half a point, making it a little easier for Americans to borrow money, but how does that impact the car buying experience? According to Kelly Blue Book, the average buyer is spending more than $47,000 on a new car. RELATED | The Federal Reserve is finally lowering rates. Here’s what consumers should know KXAN Traffic Anchor Erica Brennes spoke to Daniel Armbruster with AAA Texas to learn how these numbers impact Texans. The interview transcription, edited for grammar and brevity, is available below. Brennes: Joining me today is Daniel Armbruster with AAA Texas, to speak with me about the cost of buying a new car and a used car, as prices are still high. Armbruster: Yeah, car ownership has increased again this year, up about $115 on average compared to a year ago. So when you break it down, to operate and own a new vehicle, it's about $12,297 a year. Or that comes out to about $1,024 a month. Brennes: Is this just the payment? Or does this include maintenance as well? Armbruster: When you look at it, you're looking at depreciation finance charges, your monthly payment, and of course fuel. Brennes: Let's talk about being able to afford close to $1,000 a month for a car payment. That prices a lot of people out of the market. I can remember my car payment back in the early 2000s being $250 a month, I guess those days are long gone? Armbruster: They really are for a new vehicle, especially if you're going to finance that new vehicle. It's so important to shop around, do your research, look outside of the market you live in. See if you can get pre-approved for that vehicle before you go into the dealership, and then see if they can bring down that finance charge somehow. That higher sticker price directly impacts the finance costs as well, and that adds up over time, so you really end up paying a lot more if your interest rate is higher. And of course, that can be directly impacted by your credit score and other factors. Brennes: How does it shake out when you're looking at new car ownership versus used car ownership? Armbruster: Well, a used car is going to be a little bit more affordable, but look at the Carfax report and the history of that vehicle. Make sure that it doesn't have damage that is hidden. Make sure it hasn't been in a collision, things like that. On a newer vehicle, you don't have to worry about that, but you do have a higher sticker value. Brennes: But with a new vehicle, the second you drive it off the lot, it loses value, is that still the case or are they holding value longer because of the hot car market? Armbruster: You know, 10-20, years ago, you do see that immediate depreciation, but in the first year, the average vehicle loses $4,680 in value, and of course, that continues the older the vehicle gets. It also depends on the type of vehicle you have. Some vehicles are going to hold their value a little bit longer, but they may be more expensive as well.