1) Buying a new car is not always bad. In my case I purchased a new 4X4 Toyota a few years back. I decided to go new because of the warranty, and mostly because I don’t think buying a used 4X4 in San Diego is a good idea. Not to mention with Toyotas you don’t save that much money going used. I really didn’t want to deal with the possibility of ending up with a 4X4 someone had rallied the hell out of in Mexico and dumped before the warranty was up.
2) With rates as low as they are/were it didn’t make sense to put a lot down. My rate is in the 4’s and after inflation is figured in am I really loosing all that much money having financed the car? Can I find a better investment with my money that will return more than the approximate 2% gap between my rate and inflation? In fact I picked up a biotech stock, the same month, after the price plummeted on the negative results of a phase 3 trial and sold a few months later when it rebounded and more than doubled in price. Awesome gains of $2.80->$6 in only a few months, I would have made more if I was more patient, but I’m not above scraping the bottom of the barrel.
3) If you are upside down in your car loan there are a few things you can do. First “Gap” coverage will be offered to you to cover the difference you are upside down. Like buying insurance in black jack. Also there are creative ways of “backing” out of these loans if you get tired of them. http://www.edmunds.com/advice/specialreports/articles/115584/article.html Not to mention that you live in San Diego! Do you have any idea how easy it is to get your car stolen next to the border!
4) Are we seriously stressing out that people leveraged out car loans so much when money was that cheap? It is similar to the problem with home ownership, but cars are much easier to dispose of, plus even if you do wind up in a loss your only looking a few grand max. Unless you are mob’n in an Austin Martin.
