Car is a depreciating asset, it’s depreciating at a 5- 10 year rate so add 10-20 percent to it’s rate. House is depreciating at 25 year rate, so add 4% to house rate.
So figure the car is costing somewhere between 14-25% in true cost.
while house is running at 7 percent.[/quote]
No, he’s not. He’s right that a car is a depreciating asset, but that’s not the least bit material. The OP owns a car. He owns a house. Both debts have to be repaid. And the amount that has to be repaid doesn’t change based on the value of the security for the loan. So unless he’s planning on letting his car be repossessed or losing his home to foreclosure, he’s going to repay both of those loans.
The very old canard “never finance a depreciating asset” is as stupid as “dollar cost averaging” when buying stocks or mutual funds. Pretty words that aren’t the least bit meaningful.
