A car you use on a regular basis is a depreciating asset, aka it loses value. If at all possible, you don't want to borrow money on something that loses value. So (with a few exception that involve you driving as part of a business) you should never borrow money to by a car unless it's the only way to get reliable and safe. It can be ugly or boring it may not have the neat stuff you want. You don't need that.
If you don't have a car yet or you have a paid for car you are in the best position. Start making car payments, but not to the bank...make them to yourself. If you don't already have one, I recommend opening a high yield online savings account. There are a lot of really good ones out there that have low or no minimum balances and great rates compared to the national average. By earning interest paid to you and not from you, your car will actually cost you less than what you pay for it. Inversely if you borrow money for a car, you will end up paying a lot more for it.
If you borrow $20,000.00 for you new ride and you get an aggressive 3 year loan at 5% interest you will pay an additional $1,579.05 in interest. That's also a steep monthly payment of $599.42. Say you can keep that same rate, but get a much lower payment on a 6 year loan, now your payment is only $322.10! A lot more tempting, but remember this thing is losing value with every mile you log. Your depreciation will outpace your loan paydown and it will cost you $3,191.10 in interest. That will buy a lot of chocolate ice cream!
Do yourself a favor and make car payments to yourself and drive off the lot with a paid for car!
