<prompt> Human: I want to eventually buy a car, but when I tell people I want to pay for it in full, they laugh at me and call me stupid Of course they never explain why they just sit there and laugh.So Ill ask you guys, why are car payments better than buying the car flat out?  <response>: Like any good lawyer would tell you, it depends.Depends on what? The APR for one - If you are able to get a low APR, at best a 0 loan, then thats better than a high loan. However, that has to be combined with good personal finance habits, including budgeting, emergency fund, and not spending more than you can afford with your monthly cash flow. For a financially savvy, employed person with a good income and credit history, it may be better to take out a 5-year 1 APR loan, so that she can put the rest of her money to work in higher risk investments. For someone who is newer to budgeting, perhaps doesnt have as steady of an income, and with a low credit score it would behoove them to strongly consider saving up cash ahead of time to buy a car cash, rather than taking out a huge loan. 