As the car depreciates at a static rate, it is OK to pay off car debt at a static rate too (ie. monthly loan payments).
A house actually depreciates in value just like a car, at a static rate, but over a longer period (say 25 years). So it is OK to pay the mortgage off with a monthly payment for 25 years.
I think labeling homes as an investment and vehicles as a sunk costs is a problem that the general public has. Houses need to be maintain and upgraded to keep (or improve) its value. House values definitely don't always go up - as seen in the subprime mortgage crisis.
Sorry if I implied that the car goes from 100% to 0% value instantly. If it did, then I should pay off the loan in the same fashion. In fact, lets say a new car loses 25% of its value immediately once you drive off the dealership lot. Then you should have a car loan only for the 75% of value remaining and should have paid 25% upfront... match the debt to asset.
Vehicles can be considered an investment if it generates income (eg. taxis, commercial airplanes).
As the car depreciates at a static rate, it is OK to pay off car debt at a static rate too (ie. monthly loan payments).
A house actually depreciates in value just like a car, at a static rate, but over a longer period (say 25 years). So it is OK to pay the mortgage off with a monthly payment for 25 years.
I think labeling homes as an investment and vehicles as a sunk costs is a problem that the general public has. Houses need to be maintain and upgraded to keep (or improve) its value. House values definitely don't always go up - as seen in the subprime mortgage crisis.
Sorry if I implied that the car goes from 100% to 0% value instantly. If it did, then I should pay off the loan in the same fashion. In fact, lets say a new car loses 25% of its value immediately once you drive off the dealership lot. Then you should have a car loan only for the 75% of value remaining and should have paid 25% upfront... match the debt to asset.
Vehicles can be considered an investment if it generates income (eg. taxis, commercial airplanes).