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>> If you can borrow money for less than you can earn, you should borrow. You are right, but using a car loan to do this makes no sense. You can always get a
by georgeecollins 5y ago
>> If you can borrow money for less than you can earn, you should borrow.
You are right, but using a car loan to do this makes no sense. You can always get a lower interest rate loan against real estate or margin loans against stocks. Show me any real world lender that won't loan you money at cheaper rates against those assets than they will against a car.
Sure, people get 0% loans on cars, but if you think they that doesn't mean they paid more for the car than they could have with cash up front.. well I can't help you.
You are trying to make an economic argument and I don't find it very convincing. But in the real world every time have I seen this happen it is to rationalize overspending.
- HWR_14 5y ago> if you think they that doesn't mean they paid more for the car than they could have with cash up front. They certainly don't pay more for the car than they do if they paid with cash up front. The price of the car is negotiated, then financing. Maybe, if the dealerships didn't offer 0%, they would offer lower prices on cars. And maybe if stores didn't take credit cards they would offer lower prices. But once they decide to do it, there's no reason not to take them up on it. But they probably wouldn't raise the rates. At 0% APR, they are still making a bet that you will miss a payment and suddenly owe back interest. At interest rates today, not many people have to miss a payment to cover all the others. I'm sorry you don't find the way the world is working right now to be convincing. But I know people who are ready to pull out their checkbook after negotiating, and then are offered 0% APR. So they took it.