It's about taking dept that results in positive equity. Houses are the best example while cars are the worst. On average in the US (I understand averages are a horrible metric) the 5 year return rate is about 10.5% in equity, hell in my region it's been about 44.5% in the last 3 years. Meaning if you have 100k in dept on a 3% loan with a term of 20 years, you will have owed a little over 33k over principal over the term of the loan; but would have gained about 42k in equity leaving you with ~9k in profit. No a car is damn near always a losing stake in equity; buying new cars is idiotic but if you have the money reducing interest and term in addition to maximum years of usage will result in minimizing losses.