> Turns out that giving people free payment plans for everything only makes sense in a world with 0% interest rates.
It makes sense even in a world of higher interest rates, at least for high-value goods - especially cars. Most car manufacturers have their own in-house banks and with these, direct access to the capital markets. For the manufacturer, it makes more profit to sell a car immediately after it is manufactured and have the income immediately on the books as well (as the in-house bank directly wires over the funds), simply because storing a car costs money for whatever storage option is used, for transferring it in and out of storage, and not to forget cars also lose value when stored over time, as many manufacturers are finding out at the moment as they try to complete the build of all the cars that had to be stored away during the lack of chips era.
Even for lower-value goods like cameras, phones and drones, this calculation applies, just without the in-house banks. When a piece of tech costs at least 600$ to manufacture and you can estimate a demand of tens of thousands of units (or hundreds of millions in the case of Samsung and Apple flagship phones), they absolutely need to push as much inventory as they can, simply because they are otherwise sitting on a very expensive time-bomb: once the next generation comes onto the market, the old generation stock will only be sellable with significant discounts.
It makes sense even in a world of higher interest rates, at least for high-value goods - especially cars. Most car manufacturers have their own in-house banks and with these, direct access to the capital markets. For the manufacturer, it makes more profit to sell a car immediately after it is manufactured and have the income immediately on the books as well (as the in-house bank directly wires over the funds), simply because storing a car costs money for whatever storage option is used, for transferring it in and out of storage, and not to forget cars also lose value when stored over time, as many manufacturers are finding out at the moment as they try to complete the build of all the cars that had to be stored away during the lack of chips era.
Even for lower-value goods like cameras, phones and drones, this calculation applies, just without the in-house banks. When a piece of tech costs at least 600$ to manufacture and you can estimate a demand of tens of thousands of units (or hundreds of millions in the case of Samsung and Apple flagship phones), they absolutely need to push as much inventory as they can, simply because they are otherwise sitting on a very expensive time-bomb: once the next generation comes onto the market, the old generation stock will only be sellable with significant discounts.