Yeah, there isn’t very much difference between a $20,000 and $10,000 car, and you have to ask yourself is it worth $200 more in monthly payments for basically status? Same thing with a decent used car and ~$100/month in payments.
The thing I am proud of myself most financially is paying off my car loans early, after an emergency fund and maxing out the matching in my 401K and making sure there were no prepayment penalties.
But! People might object. The 401K/IRA is tax advantaged! But by prepaying a car loan you are avoiding paying taxes on the money you have to earn to pay the interest on the car loan, and are getting, in effect, a guaranteed return rate better than any bond.
LONG BORING TECHNICAL ANALYSIS FOLLOWS
Say you had 3 people with $1000 and could either invest it in an IRA or pay off part of a car loan of $1000 with an %8 interest rate early or invest it in the market. Assume both ones that invest the money make %8 on their investments as well.
Person 1 - Invests $1000 in an IRA
end of the year: Has $1080 in IRA
owes: $1080 in car loans.
net change: 0
Person 2 - Pays of $1000 of her car loan
end of the year: owes $0 in car loans
net change: 0
Person 3 - Invests in a taxable account
end of the year: Has $1080 in a taxable account
owes: $1080 in car loans
ALSO owes ~$20 in taxes on the taxable account
Net change: -$20
So in effect, in the third scenario you are paying $20 in interest on the money you are earning to pay off the car loan.
Of course, this is assuming that you are not talking about a large home loan you can deduct, and assuming you cannot earn a larger interest rate safely, and that you have the extra money floating around. (After I paid off my car loans early, I of course upped my 401K and Roth IRAs to the max.) IANAFA, etc etc.