Most young people are so prone to debt-buying today that they don't even ask the price of a car--just how much the monthly payments are. I believe the automotive industry understands this mentality very well. When they want to stimulate sales for a product that has been inflated out of proportion to most other consumer products, they advertise low interest rates as the biggest selling feature. Usually that is the deciding factor for a generation that has been raised on new cars and nice houses. To the young couple already in debt because of a home that is too expensive, a new car appears to be an answer to their used car problems. So they trade in the old car that costs $75 a month to keep running for a new car with $150 monthly payments. But it's not good economics, as they will discover in about two months (the first month is usually free).
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This debt problem is actually harder to deal with than overspending on a home. In most areas, homes can be re-sold at or above their original purchase price because the market for used housing is still stronger than for new housing.
But a family seeking to sell an almost new car to relieve debt is usually shocked to discover how little it's worth on the open market. If it is sold at auction, which is often the case when a car is repossessed, the sale price may be half of what an identical car sells for on a lot. Typically, when a car is repossessed for failure to make the payments, the car is sold at a loss, and the lien holder sues the borrower for the difference.