Quote:
Originally Posted by RickFLM4
Mortgages and auto loans do in fact factor in not only your expected ability to repay but also anticipated losses from other borrowers across the loan portfolio who default. And by the way, the prices you pay for insurance are affected by losses from people other than you and prices you pay at a store factor in theft, spoilage and other forms of losses not directly related to you. This can’t seriously be news to you? So yeah, I’d be ok with other borrowers bearing the cost of borrowers who don’t repay just like any other loan.
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Higher default rates eat into profit margins. Higher shrinkage and spoilage rates eat into profit margins. Insurance is intentionally about pooled risk so obviously the pool is shared.
Charge high prices because your store is losing a lot to theft. You’ll lose out to the cheaper competitor who has gotten it under control. Charge higher interest rates due to high default rates and you’ll similarly lose out to competition.
But go on. You’ll tell me there is no such thing as competition and companies are not subject to market forces when setting prices.
Then you’ll next tell me they are and you believe in capitalism.
You people speak with both sides of your mouth like your brains are full of holes or something.