Is it common for a new car of about $16k to be worth only $4-6k after three years?
It depends completely on the car.  Some cars retain their value much better, and others drop in value like a rock (no pun intended).  The mileage and condition on a car also has a huge impact on value.   According to this site, cars on average lose 46% of their value in three years, so seeing one that drops 62% in roughly 3 years does not seem impossible. That value could also have been trade-in value, which is significantly lower than what you could get with a private party sale (or what you'd pay to get that same car from a dealer) One example: a new Ford Taurus (lowest model) has a Kelly Blue Book value of $28,000.  A 2014 Taurus (lowest model) with average mileage and in fair condition has a private party value of about $12,000, for a 57% drop in value. Note: I picked Taurus because it's a car that should not have exceptional resale value (unlike BMW, trucks, SUVs), not to make any kind of judgement of the quality or resellability of the car) "It's possible the $16,000 was for more than the car.  Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car.  Here's an example.  2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500.  It has lots of miles and excess wear, so fair blue-book is $4500. I'm ""upside down"" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car.  I'll never have that, because I'm not a saver.  So how can we get you in a new car today?  Dealer says ""If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.""  All gets folded into my new car financing.  It's magic! (actually it's called rollover.)  2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car.  Why does this keep happening to me?  In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle." It isn't common to lose that much value in 3 years, but it is possible. If you don't take care of small dents, scratches, etc., you can quickly reduce the value far beyond what you might expect looking at graphs.  Another big factor is the trim level of the car that you purchase. If you spend $30,000 for the highest trim level of a car, instead of $22,000 for the lowest trim level, the higher trim car could lose 50% of it's value while the lower trim car loses only 35%. There's no way to know why the OP of your linked question had such a large loss, but again, that's not the usual experience. It is definitely a good idea to consider used though.
But.. what I really want to know.... is it illegal, particularly the   clause REQUIRING a trade in to qualify for the advertised price? The price is always net of all the parts of the deal. As an example they gave the price if you have $4000 trade in. If you have no trade in, or a trade in worth less than 4K, your final price for the new car will be more. Of course how do you know that the trade in value they are giving you is fair. It could be worth 6K but they are only giving you a credit of 4K. If you are going to trade in a vehicle while buying another vehicle the trade in should be a separate transaction. I always get a price quote for selling the old car before visiting the new car dealer. I do that to have a price point that I can judge while the pressure is on at the dealership.. Buying a car is a complex deal. The price, interest rate, length of loan, and the value of the trade in are all moving parts. It is even more complex if a lease is involved. They want to adjust the parts to be the highest profit that you are willing to agree to, while you think that you are getting a good deal. This is the fine print: All advertised amounts include all Hyundai incentives/rebates, dealer   discounts and $2500 additional down from your trade in value. +0% APR   for 72 months on select models subject to credit approval through HMF.   *No payments or 90 days subject to credit approval. Value will be added to end of loan balance. 15MY Sonata - Price excludes tax, title,   license, doc, and dealer fees. MSRP $22085- $2036 Dealer Discount -   $500 HMA Lease Cash - $500 HMA Value Owner Coupon - $1000 HMA Retail   Bonus Cash - $500 HMA Military Rebate - $500 HMA Competitive Owner   Coupon - $400 HMA College Grad Rebate - $500 HMA Boost Program - $4000   Trade Allowance = Net Price $12149. On approved credit. Certain   qualifications apply to each rebate. See dealer for details. Payment   is 36 month lease with $0 due at signing. No security deposit   required. All payment and prices include HMA College Grad Rebate, HMA   Military Rebate, HMA Competitive Owner Coupon and HMA Valued Owner   Coupon. Must be active military or spouse of same to qualify for HMA   Military Rebate. Must graduate college in the next 6 months or within   the last 2 years to qualify for HMA College Grad rebate. Must own   currently registered Hyundai to qualify for HMA Valued Owner Coupon.   Must own qualifying competitive vehicle to qualify for HMA Competitive   Owner Coupon. As mentioned, the main advantage of a 15-year loan compared to a 30-year loan is that the 15-year loan should come at a discounted rate.  All things equal, the main advantage of the 30-year loan is that the payment is lower. A completely different argument from what you are hearing is that if you can get a low interest rate, you should get the longest loan possible.  It seem unlikely that interest rates are going to get much lower than they are and it's far more likely that they will get higher.  In 15 years, if interest rates are back up around 6% or more (where they were when I bought my first home) and you are 15 years into a 30 year mortgage, you'll being enjoying an interest rate that no one can get. You need to keep in mind that as the loan is paid off, you will earn exactly 0% on the principal you've paid.  If for some reason the value of the home drops, you lose that portion of the principal.  The only way you can get access to that capital is to sell the house.  You (generally) can't sell part of the house to send a kid to college.  You can take out another mortgage but it is going to be at the current going rate which is likely higher than current rates. Another thing to consider that over the course of 30 years, inflation is going to make a fixed payment cheaper over time.  Let's say you make $60K and you have a monthly payment of $1000 or 20% of your annual income.  In 15 years at a 1% annualized wage growth rate, it will be 17% of your income.  If you get a few raises or inflation jumps up, it will be a lot more than that.  For example, at a 2% annualized growth rate, it's only 15% of your income after 15 years. In places where long-term fixed rates are not available, shorter mortgages are common because of the risk of higher rates later.  It's also more common to pay them off early for the same reason.   Taking on a higher payment to pay off the loan early only really only helps you if you can get through the entire payment and 15 years is still a long way off.  Then if you lose your job then, you only have to worry about taxes and upkeep but that means you can still lose the home.  If you instead take the extra money and keep a rainy day fund, you'll have access to that money if you hit a rough patch.  If you put all of your extra cash in the house, you'll be forced to sell if you need that capital and it may not be at the best time.  You might not even be able to pay off the loan at the current market value. My father took out a 30 year loan and followed the advice of an older coworker to 'buy as much house as possible because inflation will pay for it'.  By the end of the loan, he was paying something like $250 a month and the house was worth upwards of $200K.  That is, his mortgage payment was less than the payment on a cheap car.  It was an insignificant cost compared to his income and he had been able to invest enough to retire in comfort.  Of course when he bought it, inflation was above 10% so it's bit different today but the same concepts still apply, just different numbers.  I personally would not take anything less than a 30 year loan at current rates unless I planned to retire in 15 years. "Short answer: Absolutely not, unless you're comfortable with putting years of your labor into a depreciating asset that will incur hefty maintenance costs over its remaining life. i.e. consider your 10K gone forever once you buy the car, and then some. Some comments on your reasons: ""Keeping up with spoiled brats"" is a losing proposition, and is a mindset counterproductive to financial independence. I'd encourage you to find a way to not care about how the spoiled brats live their lives. It won't be easier when you're older and you see your peers driving fancy cars and living fantasy lifestyles that you are tempted to emulate. Break the impulse to ""keep up"" and you'll be in a much better place. A used BMW may not be a piece of junk at first, but once you hit 100K miles, everything will suddenly fall apart and need repair. Been there myself. Still have the car after 7 years, only because very few people want to buy a high-mileage German sport sedan with recurring maintenance issues. See #2. It will be a good drive for a while, then it will own you. This is not so bad when you have a decent amount of savings, but when you have nothing, it's very hard to truly enjoy the car while knowing that any problems not covered by warranty will be financially devastating. Are you prepared to ride the bus for 4 weeks while saving enough income from work to replace a bad clutch? I had to do this, and it's not something I brag about." After filing a Chapter 7 (the more common form in the USA) you have to wait 8 years to file another Chapter 7 but only 4 years to file a Chapter 13 (repayment rather than liquidation, at least in theory, in practice it does not always look that neat and tidy).   Chapter 13 you can file a new 13 two years later, but there are not many reasons you would.     This is the new law.  Under the old law pre-2005 you could pretty much file Chapter 13 as often as you like.  In fact my last firm did have one client who managed to fall behind on their house before them chapter 7 was even completed and ended up needing to file a chapter 13 while their chapter 7 was still pending. But my gas car doesn't require that, so this is a regression. I had a Model S for 2 years, it was neat but we didn't use it for road trips. For people buying a 35k car, the luxury of having a second or third car isn't a given. The question is how does $16,000/year for 6.5 years fit into your budget. Or to put it another way, what won't you be spending that money on? Housing, food, vacations, retirement fund, investments (though you can invest your car fund in the meantime), building a hefty emergency fund, kids college funds, saving for a down payment on a home, charity, etc... are all other places that money could go. I don't know what your needs are today let alone 6.5 years into the future, but I'd encourage you to consider all your financial goals and evaluate where this expense would fit.  It seems your plan is to save up to the total cost of the car and then buy it in cash. That's a valid strategy, but it means you'll have no car (unless you already own one) for 6.5 years.  Do you need a car? If so, what will you drive in the meantime (and even if you already own another car outright, you'll have gas and maintenance expenses)? If you don't need a car, then $100,000 is a rather extravagant purchase for something we just established you don't need. Would you be happier having this expensive car in 6.5 years, or having a series of less expensive cars starting now? Or buying a used model of the expensive car sooner? Or having no car at all? Also, a lot can change in 6.5 years. Cars will evolve and there'll be different models and options available. Maybe your salary will have doubled, or maybe you'll be unemployed. You could be living in a different city, have a different commute, and maybe you'll need a minivan to haul kids around or live in a place with bad winters and want a 4-wheel-drive. You'll also need to be prepared for the additional expenses that generally come with expensive cars, such as higher insurance and maintenance rates, and parking could be costly if you live in an expensive city.  The other option, of course, if the car is truly something you need, want, and can afford, would be to save up a sizable down payment and finance the rest so you can get the car sooner. Finally, there's nothing wrong with saving your money for 6.5 years, building up that fund, and then reevaluating what makes the most sense for you at that time. Maybe it will the car, maybe something else, but the nice thing about having savings is that it gives you more options. Ten year auto loans. Think about that for a moment. I paid off my house in 13 years and people are having problems paying off a car in 6, 8 or 10 years.   I never buy new and then drive them until they fall apart. My sister buys new every four years. In the past twenty years, she has paid at least $100,000 in autos. I know it is actually a lot more since one of her SUVs cost $35k, but I was going for the easy math for illustrative purposes. I bought two used vehicles for a total of $14,000.   People ask how I was able to pay off my house and buy rental properties. I understand, and I'm not necessarily disagreeing; I'm just asking how we know this.  It's one thing if it's a logical deduction you've made, but it's another if there's direct objective evidence.  Do these statistics pertain to all car sales or just factory car sales?  The car I own today is the car I've owned the longest, but it's not because I can't afford to buy another one, it's because I have absolutely no reason to.  My car was made in 2000; it has 115k miles on it.  I could write a long list of things that are still performing just as adequately as they did when it was new, and how aside from being somewhat less powerful it doesn't actually do anything worse than comparable new cars; I'll spare you. :)  Cars in 1970 were never expected to be driven past 100k miles without major service work, including an engine and transmission overhaul.  Many cars well into the late 70s didn't even come with that many digits on the odometer.  The economic conditions you mention, including the astonishing transfer of wealth between classes, are not good signs and it obviously needs to be reversed or this country is going to be a really shitty place to live soon.  And hell yes I believe it's affecting car sales.  But I'm really not convinced it's the main reason car sales peaked 40 years ago.  Housing sales only peaked a few years ago, and both markets have screwed themselves over-issuing credit, albeit in different ways.  Point is, you don't need to be able to afford a car when you can get a loan practically at the push of a button; Americans don't think in terms of what something costs, they think in terms of what it costs *per month*.  Income shrinkage has been allowed to happen because people have been allowed to spend money they don't have.  I know people living paycheck-to-paycheck who spend $150 - $250 per month on just data.  They also have $10k's of revolving credit card debt and, even worse, $10k's in student loans.  $250 per month won't save up for a new Cadillac anytime soon, but it *will* put you into a Cadillac if you don't mind having spent $63k on a $38k car by the time your loan matures.  (Edit: those numbers are pretty exaggerated, $250/mo. wouldn't get you a Cadillac until it was several years old.  You'd still end up paying several thousand more than if you'd paid cash, though... the point is that our economy is floating on credit, and this has allowed rampant overspending and living above means in the average household).  You see what I'm saying?  All other factors being equal car sales should have peaked a few years ago, or at least in the late 90s during the (first?) dot com bubble.  There was *far* more spending power out there - not income, but spending power.