week 7 - 0% purchase option on certain models. So many will...

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How do interest rates affect our purchasing decisions? It affects the decision quite a bit. For example over the last decade there were really low mortgage interest rates. This basically allowed many to purchase a higher priced (usually larger) home than they would normally have. This of course led to problems when the interest rates go up as they have a larger mortgage than they can afford (at higher rates). This is similar for car purchases. Some used rates are higher for lower amounts borrowed. So you buy a used car for a little more and save hundreds on interest (example if say $8000 is point break then under 8k = 10% interest and just over 8k is 7.5% interest, cheaper to buy over 8k car for term of loan if over 3 years). Similar for new many new ones come with
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Unformatted text preview: 0% purchase option on certain models. So many will buy a little more car than originally planned as the 0% = lower amount paid over 5 years (in some cases). Buying on a store credit card or store financing can be very expensive and during this recession it has changed peoples purchasing plans to lower priced more affordable items. So not a 60" TV but a more reasonable 37" as the interest on credit is too high so cash mostly for lower priced item. In conclusion, when making a large purchase, such as a car or a home, interest plays a large part in the way we decide whether to buy or not. These types of purchases are ones we will be paying for over a long period of time and obviously would like to know we arent paying more interest than the item is worth....
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week 7 - 0% purchase option on certain models. So many will...

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