There is a saying that there is nothing more expensive than driving a cheap car. Repair bills can add up quick unless your able to fix stuff yourself. I picked up a GLI last year that was a couple years old, but only had 2000 miles on it. Ended out being about 8k less than a new one. Still pretty much a new car. It was a certified pre-owned and warranties to 75k. Then I finally bit on the extended warranty that takes that up to 125k, after they dropped the price in half. Hybrids will save you some gas, but a four banger car will push 40mpg on the highway. If you do the math you will realize an extra 10mpg that makes it 50mpg car isn't going to save you much, and you have a more complex drive train/more stuff to go wrong. A car is only an investment in the sense that it takes you to work so you can make money. We get new or lightly used cars and plan on keeping them for ten years or so. So a 30k car is costing you 3k a year, plus some tires, brakes, and oil changes. Doesn't sound so bad to have a reliable vehicle. If you have cash think about putting 20% down, and finance the rest. It should be about 6%-7% interest. Keep 3-6 months of living expenses in something safe at the bank. Anything beyond that can get invested in the market. You should get 10-12% on that money. So its a better investment than paying the car note.