The asset behind the loan has little to do with the interest rate. That is a function of default rates. There is an opportunity cost when a loan goes bad - th

The asset behind the loan has little to do with the interest rate. That is a function of default rates. There is an opportunity cost when a loan goes bad - that money is earning zero percent - as well as the cost of foreclosure (repo man and legal work) plus the recovery value of a vehicle (or property). People who have defaulted on loans generally do not return the collateral in ready-to-sell condition, and any sales must be done at wholesale level, whereas the loan is generally for an inflated retail level. The return on the performing loans has to make up for the non-performing loans and the costs of administration and recovery of bad debts. That is how a loan portfolio works. I'm not defending the shady practices of predatory lending - but the action taken really has to be on the educational side for the buyer. The rates merely reflect the market conditions at the time, and are the wrong thing to focus on. There should be entire semester of schooling dedicated to understanding credit, seeing as it is something that nearly every school leaver faces sooner or later. Money lending and overconsumption are as old as time itself - what is really needed is for people to develop the internal dialog of 'i can't afford that, forget it'