Q: Why is it more expensive to pay of a car loan than a house loan ? Example: $250,000 lamborghini car loan ( roughly $4,000/month ) compared to $500,000 house loan ( roughly $2,000/month ) Is it possible to get a house loan and use it for a car loan ? ( I will not be buying a lamborghini, just wanted to know the difference between a car and a home loan ) Thanks !
A: Well, look at it in terms of an economist. A vehicle depreciates (loses value) and a home appreciates (gains value) If I'm a financial institution and you come to me stating that I should lend you money to buy a car, you must realize that several things come into the ballpark: - What kind of car you are trying to purchase - The expected life of the car - The expected maintenance of the car - The area you live in - Your financial history and stability If you couldn't keep up with the payments and the bank had to repossess the property, it's alot easier for them to regain funds and in most situations gain a profit for the reselling of a house. As for a car, the bank will have lost money and will never be able to recuperate the price they paid for the car, because as you know every mile you drive in your "new" car adds to it's depreciation. And no, it is not possible to get a house loan and use it on a car.