Car loans are certainly less costly than home mortgages, student loans, or other kinds of loans. So why do so many people end up defaulting and losing their cars? Find out these hidden dangers: Biggest Hidden Car Loan Danger: The Inherent Money Pit

Unlike home mortgages, student loans or other big-ticket loans, car loans are inherently money pits. A house can build equity; higher education can increase earning potential; even jewelry can sometimes be re-sold for as much as was paid for it. If you borrow to buy one of those things, you may eventually get a return on investment. But every single car loses significant value and keeps losing it as time goes by.

Solution: spend as little on your car as possible.

Of course, in order to spend as little as possible over the life of the vehicle, you need to get a well-made, fuel-efficient car, rather than the one with the lowest price on the windshield.

But a pickup truck, SUV, sports car, or "luxury" model is a guaranteed money-loser. Don’t worry about what other people will think. Think about it: when was the last time you saw an expensive automobile and thought, "I really like and respect whoever owns that!"

The best buy? Many economists actually recommend buying a used car that's a year or two old. That way you can actually benefit from the fact that cars only drop in value. Even a car that’s just six months old may offer you a substantial savings. Just have it inspected thoroughly so you don't lose what you've saved on maintenance payments. Hidden Car Loans Danger: Dangerously High Monthly Payments

Unfortunately, most people never figure out the total cost before signing on the dotted line. They end up staying up late at night trying to figure out how to make ends meet. They live in smaller houses. They skip going out at night. They don’t go on vacation.

All that sacrifice to have a brand-new SUV in the driveway!

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The Common Misconception: Auto auctions are only open to car dealers. The Surprising Truth: Anyone with the right resources can participate in the same auctions as the dealers! Think about it. How much could you save if you bypassed the dealers and purchased directly from their sources? 30%, 50%, maybe even 75%. As unbelievable as this sounds, it is possible with a little patience and research. As you probably already know from past experience, car dealers will do ANYTHING to get you into the car of your dreams. Whether you can afford it or not! I can recall a former coworker who got into a new luxury vehicle with a little "creative financing." The manager divided his mortgage payment in two. His justification: As a married man his wife was responsible for the other half of the mortgage....even though she was a stay at home mom! Luckily for them, they found a way to pay their huge car payment and avoid repossession. Unfortunately, others aren't quite as lucky. Thousands of people default on their loans everyday simply because they couldn't really afford it in the first place. This can work to your advantage. The banks and financial institutions that serviced the loans want to recoup their loss as quicly as possible. Add to that the exhorbitant cost of storing these vehicles, and you can easily see why the banks want to dispose of them in a timely manner. After all, the longer financial institutions have to store these vehicles, the less money they're going to get back. Auto auctions are the quickest way for banks to rid themselves of repossessed vehicles. Auto Auction

With the price of gas at record levels, a host of fuel saving products are being advertised. If you do a search for the key words "fuel saving devices" google will find 1.5 million pages as a result of the search. It never ceases to amaze that so many unscrupulous individuals try to take advantage of specific situations in order to scam you out of your hard earned money. And that is exactly what these gas saving devices are, scams. This current scam is aimed at taking advantage of consumers overwhelming need to lower their gas costs. These scam artists are trying to convince you that a fuel saving device installed on your vehicle will somehow miraculously cut your gasoline usage 20 to 30 percent or even higher. The Federal Trade Commission has done thorough testing of gas saving devices. From this extensive research comes this advice. The Federal Trade Commission warns drivers to be extremely wary of any gasoline saving claims for additives or devices. The test and research results to date show that there has not been any fuel saving device that significantly increases fuel economy in any way! There are a few popular ads and claims used in gas saving device advertising strategy. Here are a few to watch out for: Be very skeptical of the following kind of advertising claim. "This gas-saving product improves fuel economy by 20 percent." Claims usually tout savings ranging from 12 to 25 percent. However, the Environmental Protection Agency (EPA) has evaluated or tested more than 100 alleged gas-saving devices and has not found any product that significantly improves gas mileage. In fact, some "gas-saving" products may damage a car's engine or cause substantial increases in exhaust emissions. Gas Saving Device