I typically make 10% a year or more in the stock market. Why pull money that is making 10% or more to save 6% loan rates

From a retired Certified Financial Planner.

Automobile pricing was sort of algorithmic or formulaic for many decades: prices followed wage increases. When real wage growth stalled in the 1970s, auto manufacturers resorted very quickly to financial alchemy and manipulated payments to allow them to raise car prices. Car loans were traditionally 24 to 36 months. I recall very vividly when they went to 42 months, then 48, then, then, then. Leases, too, became a way to get around selling a "whole" car, reduced it to selling just the portion of the car's life you'd be using, so say 36 months and 36,000 miles of it.

Home mortgage rates followed a slightly different path. SROs were formed that essentially de-risked mortgage paper for investors (GNMA and FNMA among others). Mortgage interest rates fell like a rock over the decades since interest rates peaked in 1981. Prices sky-rocketed in many markets.

Still, on the non-financial side of things, what really happened was Americans stopped considering what the price tag on something is and became almost laser focused on "what are the payments?"

Today, we are for the large part, payment buyers. A lot of guys would buy a boat for $100,000 if the salesperson said the following words: Pay the taxes and 5% down up-front and $250 a month. The prospective buyer would never hear another word spoken after that . . . dreaming of sharelunkers flopping around on the deck.

Brad

P.S. I can't even imagine how many of the high-end bass boats, could cost more than, what, a Toyota Corolla. Just the price tag for compliance, alone, on a car is staggering, labor union pressures are immense, and on and on. br