Spoiler Alert:
1. Design your life so that ownership of a private vehicle is not what you want or need.
2. Failing that, when you need to buy or replace a vehicle pay cash.
3. Failing that,
a. Realistically decide what you intend to pay for the vehicle you want. Do not allow a car dealership entice you to choose a "much better package" at a higher selling price, made affordable by extending the term of the loan to 4, 5, or 6 years. (Consumers should beware of being "under water" on their auto loan from the moment they drive the car off the dealer's lot.)
b. While credit arranged by the car dealer may seem incredibly convenient to get, the Auto Finance Company is likely to charge a relatively high rate of interest AND to securitize your loan … into an Auto Asset-Backed Security. Somebody on Wall Street will probably buy your paper.
c. Your local credit union makes auto loans at a competitive interest rate, AND the CU keeps your loan on their own books.
I got these nuggets of insight from
http://knowledge.wharton.upenn.edu/a...ubprime-crisis