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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My parents own their house outright and have for ~15 years. They have an HEL with their local bank and have always used it for cars (they buy used) rather than taking out car loans. I don't see a problem with it. Make sure you get a good rate. [/quote]

This isn't very smart. They have made their house collateral for a car loan. Silly silly. [/quote]

Only if you can't pay it.  We've done that, use a low rate (2-4% after tax rate) HELOC for a smallish car loan that we could pay off in cash any day we want, and save the outlay for ongoing savings and leave it in investment accounts that are almost always doing better than 3-4% over time.

I agree on not doing it for any amount that you couldn't easily cover monthly payments for or, ideally, pay off in full at any time.  You don't want to lose your house because you can't pay your car loan (generally speaking).[/quote]

+1 I am the PP whose parents use their HEL to finance their cars and I just don't understand why people think this is so unreasonable if you can afford it. And why would my parents pay the cash (which they do have) for the cars if their money is making more for them annually than it costs to pay off over time. It also improves their credit since they have no mortgage or other loans, their only monthly payments are insurances and the cars.[/quote]

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