• Temple Square@lemmy.world
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    1 year ago

    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.