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Why are automobile loan rates higher than mortgage rates?

Answer

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Wiki User
01/13/2009

Car loans are riskier than home loans. The car looses value from day one, is in danger of collision and theft and has a limited life span. In addition, the vehicle can 'disappear' in a hurry, leaving the lender holding the bag. Homes are not mobile, real estate traditionally increases in value and the loan is over a much longer period of time.