I'm not trying to discount your point, but you're changing the math from what I stated. I'm using a $40k cap on financing, where you are using $50k in principle, and I was pointing out/reinforcing your point: at a lower interest rate(below 2.5%), going longer has a much lower impact than at a higher rate (you use 3% for comp). My point was to get him to focus on the interest rate, not the payment, because, as you were trying to point out, that will have the greatest impact on the cost of the loan, which may be an extra thousand or two. But he has to weigh that with his desire for an expensive vehicle and what he can afford on a monthly basis. My math is solid, as is yours. We're just using different base numbers.A little bit of interest percentage can make a drastic differece with a $45k+ vehicle.
This just underscores how complex the finance game can be: there are many variables that come into play.
1.Cost of loan: how much are you willing to pay a bank to use their money?
2. Length of loan: how long are you willing/able to pay for this car?
3. Amount of the loan: how much can you reasonably borrow?
4. Monthly payment: how much can you comfortably afford each month?
5. Necessity: how much do you need a new car?
6. Desirability: how much do you want this particular new car?
Each question, 1-6, has a direct impact on every other question. At the end of the day, we all need to juggle all of these questions and come up with an answer that we each can live with. Financing $35-$50k for a car is complicated, and no one wants to make a mistake that will make them regret buying the Jeep of their dreams. We're all just trying to help each other avoid that.