I agree with most on this thread. If you have to borrow the money, you are buying too expensive of a car.

Either save up longer, or buy a cheaper car. I know some place you can get lots of help on how to fix things when you buy an older Mercedes. :D

And guess what... you're still way way ahead of the guy who plunked down cash for it while it was new, got in and drove it off the lot and lost huge $$$ immediately. Nobody here is talking about collector vehicles so this viewpoint of a car being an asset is out the window.

At a very basic, common level, Car = tool for a guy to get to work to make more money. If he's so far down that he has to take out a $3,000 loan to buy said vehicle to make that trip, so be it. Better there is food on the table and a roof over his head when all he has to do is make a $150/month payment. :D

No, if he can afford $150/month, it is best to take the bus and save that 150/month until he has enough money and go pay cash for a beater car. Then continue saving that 150/month until he has more and sell the current car and take all the money and buy the car he originally wanted.

You always have to take the whole cost into account. With a mortgaged house you have a good chance to make money if you buy the house at the right price, your interest rate is reasonably low and you pay it off reasonably soon. With a car purchase, especially one that's financed, you're guaranteed to lose money unless it's some rare collectible or you need the vehicle to make money that will more than cover the car purchase.

The tax deduction on mortgage interest is nice but even nicer is not to pay any mortgage interest since the interest is always larger than the deduction.

The OP has 10 cars & motorcycles in his signature. I'm guessing he doesn't need another car.
I'm going to join the don't buy if you can't pay cash side.
It's sad that getting into debt is so acceptable. And even worse that seemingly intelligent people just don't get it.
If your looking for a used vehicle it's more than likely because you can't afford a new one.
If you can't afford a new one chances are you can't afford to finance a used one.
If you can afford a used car you can save to pay cash. it's really that simple.

He doesn't NEED a new vehicle. He WANTS one, and he's willing to go into debt to get it! :eek:

Danny

What bus?? Besides, even if you DO live where they have a mass transit system, you're dumping what, $60-100/month on a pass?

This one-
http://www.camtranbus.com/
The OP lives in Johnstwon, PA. This is their city bus system.
Dumping? So can I say you dump blank amount of money on fuel a month? What about insurance and tabs, do you dump money on this every month? $60-100 a month for a pass is most likely LESS than they would pay for fuel, insurance, tabs, etc. in a month. Thus more money to save away for the car.

Somehow, most people don't seem to understand this. The common though seems to be- Why would I want to pay off my mortgage, I won't get a deduction at tax time!

I don't have a mortgage, but what about a high earner who has a 4.75% mortgage AND gets to take the deduction, who can use the equity in his home towards a higher yielding purpose?

Actually, yes, I NEED another car. I just finished paying off a motorcycle loan. I am near the end of paying off a 10 year school loan and will have another $350 each month altogether. My Subaru I will be getting rid of. I financed that one 12 years ago and got my money's worth out of it. 262,000 miles and too many issues. Away it will go. I will keep my Dune Buggy because it is my toy. The 300SD I will keep around for sentimental reasons. It was paid off long ago and it is too nice to drive in the winter. If things get rough I can always sell it.

So, yes, I need another car. I have nothing to drive in the next 3 years while I save up $15,000.

Certainly possible, but how many people can actually do that, especially in today's economy? I'd say just about nobody.

So why don't you take out a mortgage at 4.75% and/or take out the equity in your house AND put it in the stock market? :)

My advice would be to sell a few of your motorcycles, then pay cash for the car you really need, and then concentrate on paying off all your debts.

A medical Dr. I am helping buy an existing practice, that's who:D (it was an inside joke)

I've invested primary residence equity to the hilt at least three times. But you know what they say, third time's a charm;)