interest and principal are as different as rental payments and cars are different, thus bringing back payment in fractions of cars makes no sense.

When you borrow money, you rent "Capital" (à la ChrisCook) - you may money for that rental, and what you pay is a substantially different animal than what you use to repay the Capital.

Just consider Capital to be a more liquid form of machinery. Or consider the car you rent as a narrower form of Capital (which you use for a while for a speicfic purpose and then give back).

In the long run, we're all dead. John Maynard Keynes