2 ms·

Borrowing money to buy a depreciating asset is surprising to me too.

• edw519 18y ago
  In the U.S., banks built drive-in windows in order to see their property once a week.
• helveticaman 18y ago
  I 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 ago
    To 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 ago
      Good points. I guess it's often short-sighted.