Jayson Lowe argues that car-loan ads trick you into focusing on monthly payments instead of total cost. Banks don't make money from high interest rates but from the volume of money they move. Lower rates don't hurt their profits, so obsessing over rate cuts might be missing the real picture.
You know, one of the things that consumers borrow money for the most is cars. And when you see these ads and you, you see that they're promoting what the payment will be, why aren't they advertising the total cost? And I was in that position as a consumer prior to July of 2008, where up to that point in my life, I had spent my time negotiating the price of money and felt really good about it. The bankers were spending their lives, increasing the speed of money. Again, another important distinction, not the rate, but the volume and the velocity, the control. And so, you know, the next time you tell yourself or someone tells you that they're waiting for interest rates to come down, just ask, like, were banks making money when rates were low? Are banks making money now? If both answers are yes, are we sure that interest rates are the thing we should be obsessing over? I go deeper in a free training at learnwithjay.com, or just follow along and I'll keep it simple.
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