@Anonymous wrote:
@jhtrico1850 wrote:
It's common sense. Especially if you are offered a very low interest rate, it's better to invest and earn 6%+ for $4000, than just give $4000 to the bank. Even if that makes you "upside down", you still have all of that cash.
If you had gap insurance, bought a car for $20k, put $5k down, and your car was totaled, and it was valued at $15k, the gap wouldn't pay anything, and you would be out of the $5k down.
If you didn't put anything down, you would still have your $5k, and the gap would have worked.
That's true too. But most people end up trading their car 2-3 years later (tacking on several thousands on an already high loan). Then to top it off, they are paying the bank several thousands in interest. Not everyone is paying 1 - 2% interest. So either way if you put down a large downpayment or not-- the bank is still going to take their money (either upfront or over the course of 5+ years).
Thsi is because their subsequent decisions are bad. The decision to not put money down and use your money better is sound. The decision to trade your car 2-3 yrs later, or all the other bad decisions that lead to a low score and high interest rates.. those are the unsound ones.
Lets stop making excuses for people and ask that they try to make good decisions. Then we can have compassions for the few mistakes they make.
