Originally Posted by
msu2001la
These are essentially just store credit cards though, right? You charge the purchase and if you pay off the balance in 6 months (or 12 months), they won't charge you interest. If you don't pay it off, they hit you with some ridiculous APR hike.
Furniture and department stores have been doing this for decades. No one is repossessing store merchandise when people fail to pay off these cards on time. They just apply penalties, ding your credit and eventually turn you over to a collection agency.
The difference with auto financing is that the bank actually holds the title of the car until the loan is paid off. You don't really own it, the bank does. So if you stop paying on the loan, they're gonna come get their car.
Actually, I have seen furniture stores and Best Buy occasionally enforce their right to repo for failure to pay on a store card balance. It's pretty rare, but some of the items they sell are big ticket.
https://www.investopedia.com/terms/p...erest-pmsi.asp