Handling a car loan; trade-in/payoff, and new loan

[Jim B]

Hi James, thanks a lot for following up.

This is some good feedback.  So it sounds like it comes down to 2
basic ways of handling the car purchase:

A. Create the car purchase transaction as a transfer from the Loan to
the Fixed Asset, or

B. Create the car purchase transaction as an expense (transfer from
Loan to Expense:Auto account) and create the Fixed Asset separately
with an Opening Balance of the value of the car

Am I understanding this correctly?

What I like about "A" is that it's somewhat neater and demonstrates
more directly that the loan was taken out specifically for the car
purchase.  What I don't like about it is that: it "hides" that a
purchase was made; and this is handled differently from all other
transactions made against a liability (such as a credit card).

I can see the case for handling large liabilities differently when
there's an asset involved to balance it out, but to take another
example such as an education loan, or a costly addition to a home.
There's no single asset which could be sold off to balance out the
value of the loan.  So this would be adding a large liability, but
seemingly appropriate to handle as an expense?

All that being said, there does appear to be wide support for method
"A" as I've seen mortgages handled in a similar way in the
documentation and various postings.  I'm not sure I fully understand
the advantage to doing it this way though?

In either case, it sounds like there's no good way to avoid creating
the Fixed Asset for the car and using that to represent something of
value that I hold in exchange for the loan.  I was hoping not to track
this because (as mentioned earlier) I don't like the idea of having
more than 1 way of handling all purchases (inconsistency); I don't
track all other assets... so for example if I were to purchase a TV
for $800, that is a significant purchase that could be sold off in an
emergency but I probably wouldn't create a Fixed Asset account for it.
 It sounds like we all have to draw our own lines somewhere regarding
what we track as a "major asset," would this be correct?