2007-03-21 19:29:25 · 10 answers · asked by patrolman 2 in Cars & Transportation ➔ Buying & Selling
Because while cars almost always go down (depreciate) in value, houses almost always go up (appreciate) in value.
When a bank loans you money, the only thing they have to guarantee that they will get it back is the title to what you borrowed against. If you pay the loan they get their money and then some, of course... but if you don;t, then they have to reposses and sell whatever you had and get their money back that way. With a car they will probably not be able to get the amount of the loan back, but with a house, chances are better.... therefor they will be more likely to loan against a house versus a car.
2007-03-21 19:39:56 · answer #1 · answered by Wolverine 2 · 1⤊ 0⤋
I'll assume you have the house loan already. You put down some cash with the house again I assume. Houses usually increase in value so the bank feels better about their security interest. The car won't be worth much in 5 years but the house will be worth more.
Now, let me offer this, can you get a home equity loan for the car? That way your interest rate will be lower and you will be able to take the interest off your taxes at least up to the amount of the purchase price of the house.
2007-03-22 03:08:54 · answer #2 · answered by Fordman 7 · 0⤊ 0⤋
Maybe the bank thinks you shouldn't put a sub $5k car in a $200k house?
Seriously, the other answers are correct but if you already have the house loan, you may be considered maxed out (income vs expenses) and as the others said, they do not want to risk losing $$$ on a car.
2007-03-22 02:53:07 · answer #3 · answered by mark h 1 · 0⤊ 0⤋
One of the main reasons is the fact that, unlike a car, the property value will probably Never go down and actually increase in value. A car will decrease rapidly in value, so lending on a property is a safer bet, as well as to foreclose, sale and the loan company being basically Always able to get their money back, should you fail to make payments.
2007-03-22 04:44:13 · answer #4 · answered by Gary G 1 · 0⤊ 0⤋
Because the bank has collateral if the house goes into foreclosure. That means they will not usually lose $$ if they have to sell the house. A car, because it depreciates in value is a losing investment for a bank if you default on the loan. Used cars have a higher default rate than new cars also. The bank looks at which one is the riskier investment.
2007-03-22 02:55:32 · answer #5 · answered by know da stuff 4 · 1⤊ 0⤋
Because the bank always knows where to look for that 200K house. A car, on the other hand, is MOBILE.
2007-03-22 02:42:48 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Because as was previously said, property prices can go up and often do, however a car generally depreciates in value
2007-03-22 04:22:14 · answer #7 · answered by Mike J 5 · 0⤊ 0⤋
why are you even thinking about taking out a car loan? just pay cash. especially for something under 5k.
2007-03-22 02:32:07 · answer #8 · answered by Shakespeare, William 4 · 0⤊ 1⤋
Evicting you from a house is easier than repo'ing a car.
2007-03-22 06:02:27 · answer #9 · answered by Anonymous · 1⤊ 0⤋
As a friend explained it to me:
The car can move.
The house is not moving anywhere.
So, they prefer to know where their money is.
2007-03-22 03:32:04 · answer #10 · answered by wazup1971 6 · 1⤊ 0⤋