I agree that you shouldn’t replace your car while you owe more on it than it’s worth. In fact, as I show here using Edmunds.com data:

Why Buying a New Car Makes More Sense than Buying Used

buying cars new and driving them for 10 years is financially better than buying them 5 years old and replacing them when they reach 10 years.

Having said that, I will point out that sometimes it makes no sense to put any money down, let alone 20%, on a car loan. Indeed, we bought our last two cars new, financing 100% of each one’s cost. The reason that made sense was that we were offered a 5-year loan at 0% interest.

Curiously, had we put 20% down, the interest rate would have been 2.99%. Go figure!