3 ms·

uh, no, the bank will loan you the money no matter what, as long as they think you can pay it back or you can put up collateral to forfeit in case of default.

uh, no, the bank will loan you the money no matter what, as long as they think you can pay it back or you can put up collateral to forfeit in case of default. they're not in the speculation game, they're in the loan making game.

TrickyRick 9y ago
But the interest is lower the more stable the leveraged assets. I get a lower interest if I mortgage my house compared to if I borrow with stocks as leverage, which in turn is lower than a car loan which in turn has lower interest than a loan with no leverage, even if I have a solid income and a stable employment. Banks are actually very much in the speculation game, which is why different people get different interest rates for the same loan, they speculate that the person with the lower interest has a better chance of paying back the loan. See also the financial crisis of '08
pedrocr 9y ago
You're arguing that the price of the car going up or down makes a difference for the decision if you should use a loan or not to buy it. That only makes sense if the loan is based on the car value. If the loan is based on other collateral the price fluctuations of the car are irrelevant to the price of the loan and don't enter the decision at all.
- cynicalbastard 9y ago
  > You're arguing that the price of the car going up or down makes a difference for the decision if you should use a loan or not to buy it. no i'm not. i said condition B is often present in condition A, and that given A, you'd be stupid not to do B. NOT that A necessitates B or vice versa. that's something you just made up out of thin air.
  - pedrocr 9y ago
    >no i'm not. i said condition B is often present in condition A, and that given A, you'd be stupid not to do B. Are you or are you not saying that if the car appreciates you should use a loan to buy it? That's what I read from this sentence at least: >if you're expecting an asset like a 918 or 911RS or R to go up in price, you'd be stupid to not leverage your cash at a low interest rate and put the rest of it to work somewhere else What I'm saying that unless you can get that value appreciation to make the loan cheaper it doesn't matter. Say you have 200k$ in cash and are considering buying two different cars both costing that amount. One appreciates and after 5 years is worth 300k$, the other depreciates and after 5 years is worth 50k$. Say you also have a bunch of other assets (a house, a boat, etc) that you can use as collateral to borrow the 200k$ at 10% over 5 years. If you take the loan after 5 years you've paid 250k$ for the car, doesn't matter which one. If you don't take the loan you pay 200k$ up front for the car, doesn't matter which one. The decision to take the loan would only be more attractive in the appreciating in value car if you could convince the bank to also use the car as collateral, reducing the risk of the loan, and giving you a lower than 10% rate.

TrickyRick 9y ago

But the interest is lower the more stable the leveraged assets. I get a lower interest if I mortgage my house compared to if I borrow with stocks as leverage, which in turn is lower than a car loan which in turn has lower interest than a loan with no leverage, even if I have a solid income and a stable employment. Banks are actually very much in the speculation game, which is why different people get different interest rates for the same loan, they speculate that the person with the lower interest has a better chance of paying back the loan. See also the financial crisis of '08

pedrocr 9y ago

You're arguing that the price of the car going up or down makes a difference for the decision if you should use a loan or not to buy it. That only makes sense if the loan is based on the car value. If the loan is based on other collateral the price fluctuations of the car are irrelevant to the price of the loan and don't enter the decision at all.

cynicalbastard 9y ago
> You're arguing that the price of the car going up or down makes a difference for the decision if you should use a loan or not to buy it. no i'm not. i said condition B is often present in condition A, and that given A, you'd be stupid not to do B. NOT that A necessitates B or vice versa. that's something you just made up out of thin air.
- pedrocr 9y ago
  >no i'm not. i said condition B is often present in condition A, and that given A, you'd be stupid not to do B. Are you or are you not saying that if the car appreciates you should use a loan to buy it? That's what I read from this sentence at least: >if you're expecting an asset like a 918 or 911RS or R to go up in price, you'd be stupid to not leverage your cash at a low interest rate and put the rest of it to work somewhere else What I'm saying that unless you can get that value appreciation to make the loan cheaper it doesn't matter. Say you have 200k$ in cash and are considering buying two different cars both costing that amount. One appreciates and after 5 years is worth 300k$, the other depreciates and after 5 years is worth 50k$. Say you also have a bunch of other assets (a house, a boat, etc) that you can use as collateral to borrow the 200k$ at 10% over 5 years. If you take the loan after 5 years you've paid 250k$ for the car, doesn't matter which one. If you don't take the loan you pay 200k$ up front for the car, doesn't matter which one. The decision to take the loan would only be more attractive in the appreciating in value car if you could convince the bank to also use the car as collateral, reducing the risk of the loan, and giving you a lower than 10% rate.