And furthermore, they are overpaying. In most cases if you combine the car payment with the home mortgage both do better. Taking a 30 year fixed and a car payment and combining them into one loan generally can save you money on a monthly basis and cut your amortization to a 15 or 20 year loan. The important thing to know is assuming the car gets paid off first, which is usually done from a few months to a year or more, (which is earlier than staying in their current loans) they will also benefit by cutting the amount of years on their mortgage at least 5 to over 10 depending on which loan they choose.
Interest on automobile financing is generally not tax deductible, while interest paid through a mortgage usually is tax deductible (There are some limits to the size of the loan and also some rules regarding how much cash can be taken out of the property).
This helps to insure that mortgage interest is going to be less than automotive financing interest.
The biggest problem with automotive financing as compared to mortgage financing relates to the fact that automobiles as a whole are depreciating assets while houses are appreciating assets. With mortgage financing the time that you spend paying on non-producing assets is less. (See earlier paragraph) The more efficient you are with your cash flow, the better chance you have in accumulating the assets you will need for the rest of your life.
In the end it is your decision as to what you want and need in your life. If you don't give in to your "car gene" in latter life, you might realize you didn't need it or really even wanted it. If you do still want it once your have gotten a little "longer in the tooth" and have become empty nester's, then you might be in a better position to have what you want: a sleek convertible or a 4 door truck with power to pull half the state of Wyoming.
Decisions aren't easy, and generally do not result in a right or wrong answer. They always though, have consequences. And that is what YOU have to live with.