[pc86]

While obviously not the best long-term financial decision, this situation works out for a lot of people. It's pretty risky to get a 6 or 7 year loan on a 3-5 year old car, but almost any car of almost any manufacturer should last 7-8 years minimum if purchased new and regularly serviced. Just like in the last housing bubble, being underwater is only a problem if you want or need to sell. If you are $15k underwater on your 3-year old car, that's not a problem if you plan on keeping it beyond the loan term. And even if you do need to get out of it, the best way is often not to purchase another car - it's to lease the cheapest car that will cover your negative equity and get approved by the bank. This lets you grin and bear it for 3 years and wipe out all your negative equity, while having a brand new car with service that is likely complimentary for the first 2 years if not the entire lease term (varies by manufacturer and incentives).