I think owing $48,000 on two cars is absurd.
It may be, but it is ridiculously common. Frankly, if it were not, the auto industry would be a shadow of it’s current self.
I tend to agree with you. That being said, when you can get a car for 2% financing, you are not paying much in interest over the life of the loan.
And I like to put it this way: If there were no such thing as credit, the motorcycle, motorhome, snowmobile, stereo and myriad of other industries would be mere shadows of what they are now. So would the employment numbers. The reason we’re in the mess we are in is that the credit overheated. To be blunt, a business that refuses to borrow to establish itself simply can’t compete with those that do.
Credit is a two edged sword.
Your point about business credit is right on.
In my industry we must purchase raw materials to sell. If I sell a $10K order, I will need to purchase $5K in materials. My customer will not pay until done, so I must borrow to produce. Simple.
The reason the home mortgage industry even exists is because it is rare that people could save $100K cash. On the other hand, if there were no mortgages available, would homes still cost $100K?