Is financial illiteracy with cars common?

[CaptainHenreh]

No car will ever, ever, ever make a good investment and will be, 9 times out of 10, a loss. Thus, in order to cut my losses I always go for used over new, since the benefits of a new car is not worth all the extra you'd have to pay versus a comparable used car.

If you're thinking of your car as an investment you're already doing it wrong. Is food an investment? What about going to the movies? Is a vacation an investment?

I understand the mentality of "always buy used, let someone else take the depreciation hit" but it isn't always the way to go. I have yet to take a bath, even on a new car, because I know how much I can afford, and I don't let the salesman talk me into bullshit. We drove Julie's OBS every fuckin' where, putting almost 20k miles a year on it. (Bought it new, got a good deal on the price). After 3 years, we marched into the Subaru dealership, and bought a new one. Between the "equity" in the old car and my willingness to walk away from a dealer and go to another one (or two, or 3) we were able to get a nicer (but not significantly so) newer car with better fuel economy, more ground clearance, nicer interior bits and oh yeah a warranty for basically the same payment we were making. Interest rates are so absurdly low right now that "paying in cash" for some used POS isn't nearly the winning strategy that it was 10 years ago when interest rates for new cars hovered at 6-7%.

That said, you can't be stupid about it. Buying a brand new Hyundai Equus at MSRP then ditching it 6 months later because you didn't like the color (it happens) is how you get into this mess. For many people buying used is a terrible option, because they can't afford to plop down the cash for the car they need, so they finance a too-expensive car for too long a term at too high an interest rate. But just because this happens doesn't mean buying a new car is always a terrible idea, and nailing that down in your thinking will just leave you driving broke pieces of shit all the time.