I am guessing that Princess Romeo's rationale is that the proceeds of the CD are essentially a "riskless" asset [and in this case I am not considering the possibility of IRS tax liens, etc. that would add risk] in that there is no question that the value of the collateral will be sufficient to eliminate the debt [again assuming that it was not a 100% loan, and that there is an adequate margin to cover interest due on the loan.] Whereas, with an automobile, there are many factors which might result in varied amounts of proceeds from the sale of that asset; maybe the borrower would receive enough to pay off the loan; maybe not...
Also, is there any relevance about whether the funds in the CD which are collateral for the loan are considered in any required liquidity for the borrower in underwriting the loan? Just wondering, if the borrower meets any minimum required liquidity without counting the funds in the CD, would the "wash" which Princess Romeo referenced exist?
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"When you believe He's all you need,that will be your defining moment." [from "Defining Moment" Newsong, Sheltering Tree CD]