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Even very safe investments will get you an expected rate of return higher than 1.9%. Hell, my bank's current rate on a 5 year CD is (barely) above 1.9%. In sho
by 0xffff2 7y ago
Even very safe investments will get you an expected rate of return higher than 1.9%. Hell, my bank's current rate on a 5 year CD is (barely) above 1.9%.
In short, the loan is a great deal if the terms of the loan did not affect they buyer's willingness to pay more for the car.
- kop316 7y agoThat's what I was thinking too....but this assumes a few things: a) You have that sort of cash on hand. b) You do NOT miss payments. If you miss payments, they typically have late/collection fees against you (I don't know how bad they are) or repossess your car depending on the situation. I assume both are structured to be advantageous to the dealer (I don't know specifics). Also, it is in the dealer's interest to make the loan as long as possible, as this makes the advertised monthly payment as low as possible. In addition, making the loan payments as low as possible helps decouple the true cost of the car from the buyer. This encourages more spending that otherwise would not happen.