Apparently you've never heard of GAP insurance.
Not everyone has $16,000 in cash to plunk down on a vehicle, and except for my mortgage, the only other credit payment I have is my truck.
I totaled my vehicle back in February, and while it's true my primary auto insurance company only paid actual cash value for it, GAP took care of the rest. So I hardly think having a vehicle loan is 'stupid'.
I now have another truck, and yes, I'm making payments on it. I also have GAP insurance on it, in case the unthinkable should happen to this one as well. I hope I don't have to use it, but better safe than sorry.
FWIW, neither vehicle was brand new. Both the totaled one and the one I'm driving now are 2008 models. If you want a decent hauling vehicle, you're going to have to pay for it. Bully for you if you have that kind of money lying around to pay cash for one.
I'm sorry. I wasn't meaning to offend anyone. I didn't necessarily mean that taking out a car loan was always stupid, just that the way that the people I know went about it was stupid. There were plenty of other cars they could've gotten that were within their means, and would've been just fine for their purposes. But MOST people just want a new, shiny car.
If there's no vehicle that fits your needs, that you can pay cash for and you're capable of managing you debt responsibly, as in your case, then it's not stupid. Sorry, I should've clarified that.
But you ARE paying quite a bit more in the long run, with the interest and extra insurance. Plus, a lot of times, when you're paying cash for a vehicle, you have more leverage for negotiating the price.
So, in my view, the vehicle needs to be important enough that it's worth that extra money. You should have a real need for it, not just -- "I want the newer, prettier one", which seems to be the only reasoning behind the purchases that people I know, have made.
These are usually the same people, who are complaining like a year later about all the money they're having to pour into their *usually* American-made car, for repairs. I simple have no sympathy for people who buy cars that are known to have crappy reliability and then bitch and moan about the costs to maintain that vehicle.
I am currently saving for a Toyota Prius. That will be my next car (used of course
). I'd love to get me a big ole pickup, but I can't stomach the thought of how much I'd be spending on gas. I want to cry every time I have to go to the gas station, I would really love to not have to do that quite so often.