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The company is trading risk for a higher payoff. So if that risk is realized then they can live with that as well.

Yep. And in that statement is the kernel of why credit card companies are not “all” bad. And those of us that use them to get big discounts, miles or cash, while making the full payment every month, are reaping the benefits of card use. They still make excellent profits from the fees paid by retail outlets.

Also, they are much safer than debit cards. I rarely carry cash any more, and I had a $20 bill just take up space in my wallet for several months once. But, being a prepper, I have cash on hand, if needed. ;-)

Another angle is if things go bad a paid off car insures you have transportation.

You're the only one, including Dave, that got that point. It's called knowing how to survive when you're really down and out (creative and pragmatic thinking comes in real handy). A car can get repo'd by the bank. If this person is on a tight budget, obviously living hand to mouth, they will not be able to pay their bills if they lose their income stream or face a large, unexpected expense. This can be from an accident where they can't work, they get fired, they get laid off, employer goes out of business, they get divorced, etc.

Everyone is brainwashed into thinking their credit line is good for an "emergency" where they face an unexpected large payment. Truth is, if they are living hand to mouth, tapping a credit line just makes a problem worse. If they simply stood there with their pockets hanging out, saying you can't get blood from a stone to the people wanting the big "emergency" payment, they would not come out of the emergency with a pile of debt. Going into debt is never the answer.

Financing a car purchase is not smart. If you buy it outright, it can never be repo'd, it's yours, lock, stock and barrel. If you buy a car when it's 3-5 years old, the worst of the depreciation has happened. First order of business, change the oil and filter, spark plugs, wires. Through monitoring the oil color you'll see how bad the wear situation is (new owners typically don't change oil much). Change it (and filter) a few times after only a few hundred miles, say a month or two using a quality conventional oil like Mobil, to flush out whatever has happened as good as you can. Then go to changing oil and filter every 2k to absolutely no more than 3k.

You can buy a car just once every 10 years if you maintain the car well; for most people that's only putting 200k to 250k miles on the car, which is not difficult with today's cars (well, the ones with a little heft to them; the tiny cars are mostly not strong enough in terms of the drive train, suspension, body/frame and interior to last that long and still be in decent shape). If you do a good job of it, you can get up into the 15-20 year range.

Make a car payment to yourself every month of $50 to $400, depending on your automobile tastes. You can invest this money to earn a small amount of interest and mature the year you want to buy the car.

This way - you're earning interest on buying a car instead of paying interest. But most people won't do this because they think of their "investments" as ONLY what is locked away in their government-regulated retirement "account". It simply kills them to have a few thousand cash just sitting there, they go nuts unless they buy something and spend it.

Either way you have a car payment, this way it's just going to be half. But young women today are freakishly brainwashed to think if they don't have a brand new car that the car will collapse from underneath them at any moment. And young men are freakishly lazy and hate the idea of changing their own oil like a squeeky girl at a tea party cuz they might get their precious baby soft hands dirty. Bottom line, the woman they moved in with does not them having the dominant role of auto mechanic, as that would give them too much power in the relationship (as in, I'm working on your car, you'll have to take mine). These women prefer a) never submitting to a husband's authority, instead having an emasculated man-boy, b) overpaying for everything (even while they are being cheap) and c) relying on "professionals" for everything and being financial slaves in our group-think society.