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Only in the US, as far as I know. I was actually shocked when I came here at the extent to which borrowing money to pay for a car is seen as normal. Personally
by hugh 18y ago
Only in the US, as far as I know. I was actually shocked when I came here at the extent to which borrowing money to pay for a car is seen as normal. Personally I still tend to think that real estate is the only thing worth borrowing money to buy, and that if you can't afford a $20,000 new car you should buy a $3000 used car.
As a side effect, I see a lot more new cars on the road here than in Australia. Also, used cars depreciate a lot faster.
- ojbyrne 18y agoAlso, used cars depreciate a lot faster. I'm guessing you mean compared to used cars in the US, because generally I hear that new cars depreciate the most in the first two years.
- hugh 18y agoSorry, yes, what I meant to say was: cars depreciate faster in the US than they do in Australia.
- rudyfink 18y agoBorrowing money to buy a depreciating asset is surprising to me too.
- edw519 18y agoIn the U.S., banks built drive-in windows in order to see their property once a week.
- helveticaman 18y agoI don't think it is a bad move per se. Mining companies buy machinery on credit, and this machinery depreciates. But in the context of a consumer, I agree, it's surprising. It's short-sighted.
- ojbyrne 18y agoTo put it in the same context, there's lots of jobs out there that essentially require a car - the job is in an area poorly served by mass transit, or its a job that requires visiting clients' offices. It's clearly not short-sighted then. In addition, up until the recent gas price increase, there was a perceived tradeoff between living in a small apartment in the center of a city, or living in a larger, cheaper house in the suburbs. The total cost of car+house was generally perceived as paying less for more versus the inner-city apartment. Finally, if you have children, there's going to be tons of activities (sports, summer camp, etc.) that basically require a car. It's an investment in their future.
- helveticaman 18y agoGood points. I guess it's often short-sighted.