then why not have a longer term? Especially if you intend to keep the car that long or longer. My parents recently bought a new vehicle, and were able to get 0.5% (iirc) for a five year term. They could have paid cash if they wanted, but I don't blame them for financing when the rate is that low.

You are going to be badly underwater on that car for a very long time. 84 months? That's seven years, and the idea of still owing money on a car that is more than six years old and declining in value is appalling to me, regardless of the interest rate. The idea of carrying a debt on a car that is larger than the value of the car for half a decade? No thank you. I realize these are values that are considered today to be obsolete and stupid, but they are what I grew up with and I choose not to abandon them.

That being said, I have a 4% 30-year-fixed on my home, and you can be very sure I'm not paying it off early. The loan is, however, less than the value of the house.

Worth looking at anyway and doing the numbers. You get a new car with the latest performance and safety technology for a lower monthly cost than buying a late model used car which could already have over 50,000 miles on it.

A seven year can can be appropriate if (and only if) the asset used as collateral is of sufficient quality that there's reason to believe it will still be useful in seven years (reasonable) and will retain enough value over time compared to the outstanding balance (?).

I never finance my vehicles. I only buy new vehicles, and always pay cash, because I can. And I keep them an average of 11 years. When I trade one in on a new purchase it has pretty well earned it's keep. I'm happy if they give me anything at all, and don't charge me to have it towed away.

I know with that usage history it would make sense for me to use long term, low interest financing to buy my vehicles, but I just don't like making monthly payments. I also don't like having any payments coming directly out of my bank account. All of my monthly utilities are now automatically paid by being charged on a credit card (for which I get cash back at the end of the year) and I review and pay that bill on-line monthly. That way I have no monthly checks to write, never owe anyone any money, and have some additional protection through the credit card company. If I could set up a similar method to pay a car payment with the credit card account each month I might consider long term financing of a vehicle. It would make financial sense and still not be a hassle.

but the last time I bought a new truck I got a $4k break off sticker if I financed part of it for at least 3 years at near nothing interest.

especially if they want to trade it in 48 months.

for a new car, you should be buying a used car.

If I have a good job and can make thee payments and I want the luxury of a new car, why not?

.... this month, but maybe not next month?

Just sayin.' Leasing actually makes sense in some situations. One size does not fit all.

Americans do not LOVE debt, Americans are, on the whole, simply underpaid to the point that they can't afford transportation or shelter without going into debt. Public transportation is spotty at best, and even in places that have it, makes travel take longer, turning 10 minute trips into half hour or longer ones where you're stuck waiting for most of the time.

I'm fairly certain that the vast majority of people would prefer to be wealthy enough not to ever have to be in debt, much less 'love' it.

waiting to purchase or not purchase. people used to either save for things or not buy what they couldn't afford unless absolutely necessary. now this is not all people of course; there are some good savers out there and some people are forced into debt. but many people fall into the lifestyle trap of granite countertops, stainless steel appliances, luxury cars and every other thing they simply want.

and we wonder why people haven't saved shit by the time they come to retirement...

sP

I agree with you regarding the silliness of "Americans love debt." I don't think, however, that the issue of low pay and high prices has quite the validity you attribute to it, because of the way that selling is done today. The sales pitch is always about the amount of the payment, and scrupulously avoids mentioning the price. Americans buy a low monthly payment, and give no thought to total price, or to the fact that the "low monthly payment" means being in debt.

I think American just don't care about debt. We accept it as a way of life, and give no thought to the nature of what debt does to us in the way of decreased mobility.

As a country, we were deliberately sold on debt (or sold into debt, if you will.) Iirc, the notion of credit cards were introduced initially in much the same way as a bar tab, a larger single bill that came due at a given point in time. But 'keeping up with the Jones' was already an established meme exploited by corporations, and with stagnant wages not keeping up with inflation, credit card companies saw a way to make far greater profits by convincing people to take on 'revolving credit' and sell them on keeping up appearances by taking on debt that grew and grew over time, thus growing profits for the corporations.

So Americans' debt problems were not simply accidental, they were a matter of design. Much like our obesity problems, really. Careful thought and consideration goes into the manufacture of every major edible product out there to trigger every possible biochemical response in the human body to get us to overeat, and thus buy more product, reinforced with ad campaigns to convince us that eating these horrifically unhealthy products is 'fun' and will make us more popular, more successful, happier. (And right there in between the food commercials are the ones for using Visa, Mastercard, Discover, or their brand variants 'Citi' or 'Chase' or whatever.)

Our lives are manipulated up one side and down the other.

We buy all sorts of nonsensical propaganda. That debt doesn't manner; that terrorists are an existential threat; that taking off our shoes at airports will "keep us safe;" that health insurance is the same thing as health care; that our soldiers are dying in Afghanistan to "deny them space in which to plan their attacks;" that buying more goods from foreign sources ("increased consumer spending") will improve our economy...

My favorite comes from James Howard Kunstler in "Coasting Toward Zero,"

...we indulge in fairy tales about the “shale oil miracle” because it offers the comforting false promise that we can drive to WalMart forever (in self-driving cars!). Has it occurred to anyone that we no longer have the capital to repair the vast network of roads, streets, highways, and bridges that all these cars are supposed to run on? Or that the capital will not be there for the installment loans Americans are accustomed to buy their cars with?

It was a 60-month loan. It made the payments smaller and, with no interest, doesn't cost me any more.

But if the interest rate is not 0 or close to it, then you could potentially be paying a lot more than whatever the car cost, which makes the longer terms not so smart.

Of course this says nothing about depreciation. But a Mazda like I have is well made and will run for many more years, should I choose to keep it.

I don't think I will keep because I just don't like it all that much and am looking to get a car that is more fun. That has become important to me. I like driving and I like cars, especially sports cars and am willing to make a sacrifice of practicality in favor of enjoyment. I'm not getting any younger and might as well have fun now while I can instead of after I retire. A car is not just a means to an end for me. In some cases it is the end. My dad retired and bought a Porsche 911 (7 years old, but still). I'm not waiting that long for my dream car. If I can afford it (not now but soon-ish), then why not?