Re: car loan
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Look at it like this;
Best case circumstance: You continue to earn money, get raises that keep up with inflation and able to both pay all your bills and your current lifestyle.
Worst case: You get laid off, file banktruptcy, are allowed to keep your home since it is in the homestead laws but lose your car to compensate your other debtors. Would you rather own your home outright or your car?
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You answered your own question incorrectly. You're right that you want to have debt in the depreciating asset, but the reason is so that by some chance the asset becomes worth less than what you owe on it you can default.
The homestead act has nothing to do with depreciation or appreciation.
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