This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.

Traditional advice says one thing. Let’s discuss what makes sense.

1 Financing a car will likely cause a dip in your credit score. #2 If you finance your car, you will likely increase your debt-to-income ratio. #3 If you make a downpayment on a car, you might decrease your house downpayment. #4 One is an appreciating asset (home). The other is a depreciating asset (car). The home is the better option if you’re trying to build wealth because a car will likely consistently decrease in value while a home does the opposite. #5 Real estate is an intelligent way to build wealth over time and create passive income even if you don’t want the property. But here’s the kicker… What if you don’t want a home because you desire to continue renting a low-maintenance lifestyle? It probably doesn’t make sense to buy a home first. Every person has a unique situation. Some people dream of owning a home. Others don’t dream of owning anything except investments and a nice car. And this is good enough for them. Fewer and fewer people are opting into the American dream. They don’t want ownership and all the responsibility it comes with it. They want a different type of freedom. A car payment is cheaper than your modern house payment, but the average car doesn’t cost six figures, so you’re not going into considerable debt when buying it. Before You Buy A New Car But before you get excited about buying a car, you need to ask yourself a few questions: Do I genuinely need a new car? Is it a financial burden if you have a car payment now? Can I afford a new car, and if so, how much can I afford? Am I interested in buying real estate within the next 1–3 years? How much can I afford in monthly or yearly maintenance fees? If I buy the car, will my net worth be positive or negative afterward?

Your answers to these questions will help you better decide which path to walk. The question is, what type of asset will benefit you most at this time?

For some people, the house doesn’t make sense. For others, the car is a fair bet to follow through on.

Everyone has a different situation, and just because a person buys a car before a property does not make them economically imprudent. Some people who own cars do financially better than people who “own” homes.

A home allows you to build wealth if you utilize it correctly, but it does not make you economically sound.

This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.

This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.