Originally Posted by kane

Well, if there were no loans there would be almost no car companies. The average household in the US consists of 2 adults 2 kids and a pre tax household income of around 44K. With four people living on an income like that it would take most of them forever to save enough to buy a decent car.

Don't get me wrong. I prefer to pay cash if at all possible and I think credit and debt is killing this country. I will never have another car loan. Mostly because I don't care about the new cars so there will be no way I will be shelling out 40K for a truck or even 20K for a new car. If I have 20k cash to spend on a car I would get 71 GTO or a 69 Camaro convertible or something like that.

Still most people would never be able to buy a decent car without a loan which would cause the car companies to crash and burn or only sell very cheap cars that don't allow them much profit. For most people a car loan that has a reasonable interest rate allows them to buy a good quality, reliable car that can get them to and from work without worry. Where the trouble sets in is when these people making 44K buy a 45K truck or SUV or they buy two 30K cars and they end up spending a huge chunk of their income on car payments.