Originally Posted by
wahoonc
IMHO most cars loans go upside down pretty quickly due to accelerated depreciation...look at the dump in market value of SUV's when gas peaked at around $4 a gallon. Even with a 20% down payment and a 48 month loan people were upside down. Also rolling over old loans into a new loan will get you upside down pretty quickly.
FWIW I typically pay cash for a gently used vehicle rather than buy new, the greatest deprecation of most new vehicles is in the first year or two, then, unless there is outside influence it pretty well stabilizes over the remaining life of the loan. Best bet is to pay cash or take out a very short loan and DON'T BUY NEW! Let someone who can afford it (or thinks they can) take the depreciation hit.
Aaron
Pickup trucks rarely depreciate like that though...unlike SUVs, more people buy trucks to use them rather than to poke around in a titanic vehicle. This helps keep any truck that's a proven brand (Ford especially, then Chevy/GMC, then the rest) in a decent resale bracket.
Anyways, if it can't be paid off in 4 years, it shouldn't be bought....if it depreciates so much in 2-3 years that you're upside down, you bought a really horrible vehicle. Nissan Titan comes to mind (no offense to those that own them, they look nice, have good power, but the drivetrain just can't handle what a equally powered American Truck can...it just isn't competitive in it's price/performance bracket, thus not on the list for those that want a work truck, which is the people most likely to pay top dollar, as it's a write-off anyways).