Quote:
Originally Posted by xoxoxoBruce
Because they need the car to get to work and earn the money to pay for the car,
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Yes, a home equity loan also makes no sense for same reasons. Rare exceptions may exist due to abnormal events. But we are not discussing the abnormal. We are discussing a majority who foolishly and repeatedly buy cars with loans.
Why would the exception need a car loan? To never waste money on car loans in the future. To get out of debt and never need a car loan in the future. An exception.
One can buy a Honda or Toyota for $4000. Why apply for a car loan for a $25,000 car (or a $41,000 Chevy Volt) when the owner can only afford $4000? Because he wants to pay more money for every future car?
Consumer Reports is full of inexpensive seven year old cars that are reliable.
Borrowing money to buy something that does not depreciate makes sense (ie a house). Borrowing money to create an income source makes sense (ie a business). Borrowing money to only remain in debt on something that loses value quickly makes little sense.
Why do so many have balances on credit cards? Same 'need'. Makes so sense. But then many (is it a majority?) also do that mistake.
Ironically (and this never made sense to me), many know this is illogical. And still do it. Why borrow money to almost double the cost of a product?