That's wild to see 10 year car loans. But on the other hand I also saw some high-end Cadillacs are north of $150k brand new, so some folks are really going to do anything to conspicuously consume. I can't fathom spending so much money on a massively depreciating asset.
In many cases, people getting 40 year mortgages would be better off just continuing to rent. We just bought our first home with 10% down and a 30 year note and we’re now basically paying rent to the bank.
It’s pretty nice to be able to lock in a price for 40 years. Whereas rent will typically increase a few percent each year. So after 40 years, if you’re still there, rent will be 3-5x the original amount.
Whereas mortgage payments with a fixed interest rate don’t increase so really only expenses like taxes and insurance increase over time. So after 40 years your monthly spend may be 1.5-2x.
I’m expecting that eventually there will be an interest only perpetual mortgage where the principal never decreases so banks are basically just buying secured annuities based on the real estate collateral.
Some countries have 99 leases that sort of operate like this and I thought it was strange that people would be willing to pay to purchase these leases where they never owned the property. But I guess some stability is better then none.