I buy a 3 year old car every 3 - 5 years. You can buy a 3 year old low mileage car at 60% less than it's new car price. When cars reach the 3 year old mark, the price is drastically reduced by 50% - 60%. High income people tend to buy a new car then trade it in every 3 years. Since it was traded in for vanity purposes, it most likely is still a very good car.

Three year old cars usually have about 35K miles on them. I find out what the price of it was when it was newly purchased. I offer to pay 40% - 45% of that price, then I purchase the "very best" 100K mile extended  warranty that the dealer offers,  no scrimping here - What good is an extended warranty if it won't cover most repairs? I also make sure that the warranty provides a rental car while mine is in the shop.

In summary, I've paid a total of about 50% of the car's  price when it was newly purchased, have a 100K mile warranty that I can transfer to the next buyer, enjoy lower notes, drive a fairly new car and have minimal repair worries.

My econ. professor in 1970 said: "there is only consumption and postponed consumption."  Luckily I listened.  No car loans or credit debt - ever.  Now at 60, we can comfortably retire.  And we always had OK cars, too.

Well sometimes you just have to have something dependable for your safty and peace of mind. Im a single mother who knows nothing about mechanics. I recently got a good job about 22 miles from my home. The route is very rural and dark. with dangerous roads. I cant be out of work waiting on my used car with no warranty to be repaired. I cant be out on a dangerous road standing beside my broken down used car late for work either. Since I am spending alot of time in the car daily Its worth being comfortable with heat and air and with at least something with some type of audio entertainment that all works. Not too many used cars can provide me with this . It takes money to live. Thats why we work. Cut back where you can but if you need a good car its not the end of the world.

I had a similar experience car shopping six months into my first job.  My existing vehicle had over 100k and reliability had become an issue.  Looked at a base model  Acura but realized that the car would cost me 75% of my gross income for the year!  The thought of working a year of my life and having a base model car to show for it didn't appeal.  Instead I chose, a then reasonably priced VW, which I drove for 11 years.  It worked out to less than 3% of my gross income for that time period excluding insurance and gas.

A car was a necessary expense for me due to a lack of alternate transportation but I viewed as such and contained the cost.

All of these responses make sense in one way or another. The only problem with sticking to what was suggested many times over (drive an older car and take care of it,set the assumed monthly payment aside and save  up for it-don't forget insurance costs...they are usually overlooked but must be included in the monthly cost- but back to what I was saying...MOST people buy cars based on emotion FIRST and we all know what thinking with your heart does. It is very hard for the average person...especially the younger ones to think with their heads when making a large purchase...they tend to rationalize their decision by working more and enjoying their free time less. Like someone said before, think about it for 3 months and then continue. Just my .02.

Cars don't always lose value - there are some that actually increase in value!  You can get a very "cool car" for a lot less money.  I leased a Z3 and I have owned three '64-'65 Mustangs.  At the end of the Z3 lease, I owed money.  I sold each Mustang  for more than I paid.  All were restored, so the maintenance costs were nearly non-existant.  I talked my sister into buying a Mercedes 280SL - a vintage convertible.  Same thing happened, she drove that very cool car for 3 years and sold it for more than she paid.  

I've owned 5 cars in my lifetime (I'm 53) and I believe in driving cars until the wheels fall off. Three of the cars have been new, and I financed them, but with low or no interest loans. I figured I could make more investing in the stock market with the cash I otherwise would have spent on the car.

I had to buy a vehicle at the time I bought my SUV. It was probably an over reaction to the reason I had to buy a new vehicle, but overall, I'm still happy with it.

The reason I needed a new vehicle was because my previous car, a Toyota Corolla, was totaled when my wife and I were towing a trailer from CA to FL. We were rear-ended by a semi in AZ. Luckily, my wife "only" had whiplash, and I had othroscopic knee surgery to repair torn cartilage I sustained in the accident. I'm glad I had my St. Christopher's medal in the car then.

We only had a day to buy a car, and we pretty much decided it would be a Toyota. We got low interest financing on the Hylander Hybrid, and although it'll be years before the gas savings pay for the cost of the hybrid part, I'm glad I got what I wanted, esp. when I ended up needing to relocate quickly from FL to KS. I think we have about 18 months left on our loan, which is paid through automatic deduction from our checking account.

My wife wants to get a Lexus RX4 SUV, but is too busy to shop. She probably won't get around to it until the Highlander is paid off.

I  LIKE DRIVING MY OLD TRUCK . ITS A 2002 MODEL WITH 15000 MILES ,I MADE $700 A MONTH PAYMENTS FOR 60 MONTHS , WHEN FREINDS AND FAMILY ASK WHY I DONT TRADE ,I TELL THEM I WOULD RATHER HAVE THE MONEY IN THE BANK JUST IN CASE I DECIDED TO TRADE, BOTTOM LINE TAKE CARE OF WHAT YOU HAVE.

If you are filthy rich, buy a new car every day, no biggie. However, if you are like the majority of working Americans, buying a new car is "emotional spending" .  We have become a nation of "I see it, I gotta have it" no matter the cost.  Of course, greedy lenders and credit card companies have been the major contributor to the mind set we currently have versus the mind set of 50 years ago. The flip side of that coin is the fact that we were not forced to take them up on their offers. It is never too late stop the "spending what we do not have demon".Do not buy anything new except food. Everything else should be researched, pondered, prayed about and ultimately ask ourselves the question I recently employed "WHAT DO I NEED THIS FOR?" (I stole this from someone else) It works really well and certainly made me realize how "stupid" buying a new car and many other things really is.

Buying a New Car is the worst investment. You will never recover the money is sucks from you. Buy a used reliable car and be content. The less debt you have, the more money you have. Credit isn't free money. It's the most expensive kind out there.