Share your insights or perspective on the financial matter presented in the input.

Recent college grad. Down payment on a house or car?
When I was in that boat a few years ago, I went for the car first.  My thoughts: If I get the car first, I'm guaranteed to have a car that runs well.  That makes it more convenient to commute to any job, or for social functions.  I ended up dropping about $20k into a car (paid cash, I don't like being in debt).  I chose to buy a really nice car, knowing it will last for many years to come - I'm expecting to not replace it for about 10 years from the purchase.  I would urge you to consider paying in full for the car; dumping $20k+ is a lot, and there are plenty of nice cars out there in the $10-20k range that will work just fine for years to come.  One benefit of paying in full is that you don't have a portion of your income tied into the car loan. The main reason I chose not to go for the house first had more to do with the difference in commitment.  A home mortgage is a 30-year commitment on a large chunk of your income.  With the job market and housing markets both currently working against you, it's better to wait until you have a large safety net to fall into. For example, it's always recommended to have several months worth of living expenses in savings.  Compared to renting, having 6 or more months of mortgage payments + utilities + insurance + property taxes + other mandatory expenses (see: food, gas) comes out to a significant amount more that you should have saved (for me, I'm looking at a minimum of about $20k in savings just to feel comfortable; YMMV).  Also, owning a house always has more maintenance costs than you will predict.  Even if it's just replacing a few light bulbs at first, eventually you'll need something major: an appliance will die, your roof will spring a leak, anything (I had both of those happen in the first year, though it could be bad luck).  You should make sure that you can afford the increased monthly payments while still well under your income. Once you're locked in to the house, you can still set aside a smaller chunk of your income for a new car 5-10 years down the road.  But if you're current car is getting down to it's last legs, you should get that fixed up before you lock yourself in to an uncomfortable situation. Don't be in too much of a hurry to buy a house.  The housing market still has a ways to go before it recovers, and there's not a whole lot to help it along.  Interest rates may go up, but that will only hurt the housing market, so I don't expect it to change too much for the next several months.  With a little bit of sanity, we won't have another outrageous housing bubble for many years, so houses should remain somewhat affordable (interest rates may vary).  Also keep in mind that if you pay less that 20% down on the house, you may end up with some form of mortgage interest, which is just extra interest you'll owe each month.