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Message: <blockquote data-quote="Old One" data-source="post: 2372196" data-attributes="member: 83">JD - That comment comes from 2 sources.1) If you purchase a new car on a note longer than 42-48 months (depending on make, model and downpayment), the car will be losing resale value faster than you are paying down the loan.  Let's say you buy a new car for $25k and put $1k down.  If you total the car 2 years into ownership - the car may only have a book value of $15k, but you owe $16.5k on the car loan.  You are going to have to come up with $1.5k out of pocket just to pay the loan off.  This is called being "upside down" on the car and is not a good position.  Unless they are buying a used car or making a significant downpayment, I usually don't recommend people get a car loan of longer than 36 months, even if they plan to keep the car long term.  If they can't afford it with a 36-month loan...they can't afford the car.2) Cars take their steepest deprectiation in the first 2 years (usually 20-40%).  Buying a 2-3 year old used car through a dealer pre-certification program (clean car, extended warranty, roadside assistance) is a much better way to go...let some other chump take the steep front-end depreciation...and you can finance 4-5 years without getting "upside down" on the transaction.  This works even better if you drive the car for 7-10 years, bank the extra payments and aim to pay cash for the next and all future cars.Many Americans buy brand new cars, finance them with 5-8 year car notes, drive them for 2-3 years and then trade them in on another brand new car.  I did a regression analysis on this a couple of years ago using a 2-car couple buying $25,000 autos with each transaction and they ended up wasting something like $400,000 in depreciation and interest opportunity costs over a 30-year car buying time frame.And don't even get me started on those 0% interest "deals" being offered by many dealers...bleah!~ OO</blockquote>

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