Long loans made sense to solve affordability when interest was 0-3‰ prime.
It makes affordability WORSE at 7+ percent prime, because the longer term exaggerates the interest rate more. That’s why legacy OEMs are offering 5% on 36 month loans.
When interest rates spike, the only solution is to offer a cheaper product (principle). Lengthening the term doesn’t work.
Long loans made sense to solve affordability when interest was 0-3‰ prime.
It makes affordability WORSE at 7+ percent prime, because the longer term exaggerates the interest rate more. That’s why legacy OEMs are offering 5% on 36 month loans.
When interest rates spike, the only solution is to offer a cheaper product (principle). Lengthening the term doesn’t work.