The news that foreclosed homes are less expensive than cars in Detroit got me thinking about using home equity loans for purchase vehicles.  In an environment with rising property values, given that home interest is tax-deductible, does it make sense to use a home equity loan to buy a vehicle?  Perhaps at times, but as an article says in The Olympian, do the math.

"I issue a note of caution on this," says Don Taylor, a columnist for Bankrate.com and an associate professor of finance at The American College in Bryn Mawr, Pa. "If you don’t have the discipline to do more than the minimum payments on these loans, then this is not a good idea."

Consider this: by taking out a home equity loan to buy that sparkling new car, you are paying for the vehicle for the duration of your loan.  You can imagine the added interest costs that you incur in that scenario, even with the additional tax break and additional payments on your vehicle. 

Think carefully before you use that home equity to make that extra purchase.