Need advice on buying a Kirkham cobra

[RodKnock]

There is absolutely nothing wrong with financing a car purchase, especially using a HELOC, depending on one's financial and employment pictures. What if this person has money tied up in Treasuries, stocks, bonds, gold, pork bellies, has adequate life insurance, kid's go to State schools or their education is being funded by a 529 plan or similar method? Blah, blah, blah. It all depends, but prudent and reasonable leverage is just fine.

I took out my Kirkham yesterday aftrenoon for a 100-mile drive. Loved every minute of it. It almost makes me forget about the money spent on it.

[SP01715]

Originally Posted by RodKnock

There is absolutely nothing wrong with financing a car purchase, especially using a HELOC, depending on one's financial and employment pictures. What if this person has money tied up in Treasuries, stocks, bonds, gold, pork bellies, has adequate life insurance, kid's go to State schools or their education is being funded by a 529 plan or similar method? Blah, blah, blah. It all depends, but prudent and reasonable leverage is just fine.

I took out my Kirkham yesterday aftrenoon for a 100-mile drive. Loved every minute of it. It almost makes me forget about the money spent on it.

My financial guy had the same theory. I did not listen to him because I did not want to leverage toys to the point that I could not dump them without taking more cash out of my pocket. I paid cash for most of the stuff I own, and I have actually probably lost less money than if I would have left it in stocks. The only exception was a 250K boat that I put 100k down on because it was a write off, and I was still not upside down in it.

The problem is a lot of people were not reasonable when it came to using their house as a credit card.

[jhv48]

You only gamble with your house (which is what you are doing with a HELOC)
if you can afford to lose it!

Buying a toy or a vacation, or furniture, or a swimming pool using a HELOC is a gamble. You are betting that the interest rate (which is adjustable on a monthly basis) won't climb too high before you can either pay it off or re-fi the house to include it. Easy to do when values are climbing steadily. Tough to do today with values actually declining.

Millions of people gambled and are losing their homes because of it. If we learn nothing from this crisis, then we are doomed to repeat it.

Just don't expect me to come to your aid when you go belly up.

Banks invented the HELOC to entice us to spend our home equity on crap we can't afford otherwise. Next they will try and tap into our automobile equity in order to allow us to dig our hole even deeper.

Banks love debt. Ours, not theirs!

It's time to think outside the box. Obviously if banks want us to do it, it is good for THEM!

[SP01715]

Originally Posted by jhv48

You only gamble with your house (which is what you are doing with a HELOC)
if you can afford to lose it!

Buying a toy or a vacation, or furniture, or a swimming pool using a HELOC is a gamble. You are betting that the interest rate (which is adjustable on a monthly basis) won't climb too high before you can either pay it off or re-fi the house to include it. Easy to do when values are climbing steadily. Tough to do today with values actually declining.

Millions of people gambled and are losing their homes because of it. If we learn nothing from this crisis, then we are doomed to repeat it.

Just don't expect me to come to your aid when you go belly up.

Banks invented the HELOC to entice us to spend our home equity on crap we can't afford otherwise. Next they will try and tap into our automobile equity in order to allow us to dig our hole even deeper.

Banks love debt. Ours, not theirs!

It's time to think outside the box. Obviously if banks want us to do it, it is good for THEM!

Great post...

And I actually know someone that tried to take equity out of a car. He could not find a bank that would do it.

[mln385]

Originally Posted by jhv48

You only gamble with your house (which is what you are doing with a HELOC)
if you can afford to lose it!

Buying a toy or a vacation, or furniture, or a swimming pool using a HELOC is a gamble. You are betting that the interest rate (which is adjustable on a monthly basis) won't climb too high before you can either pay it off or re-fi the house to include it. Easy to do when values are climbing steadily. Tough to do today with values actually declining.

Millions of people gambled and are losing their homes because of it. If we learn nothing from this crisis, then we are doomed to repeat it.

Just don't expect me to come to your aid when you go belly up.

Banks invented the HELOC to entice us to spend our home equity on crap we can't afford otherwise. Next they will try and tap into our automobile equity in order to allow us to dig our hole even deeper.

Banks love debt. Ours, not theirs!

It's time to think outside the box. Obviously if banks want us to do it, it is good for THEM!

Just an FYI you can get an equity loan with a fixed rate..

[jhv48]

[quote=RodKnock;891778]There is absolutely nothing wrong with financing a car purchase, especially using a HELOC, depending on one's financial and employment pictures. QUOTE]

Yes there is. A HELOC has a variable interest rate and the sky is the limit on how high it can adjust (gambling again).

Why not get a simple auto loan with a fixed interest rate for the life of the loan?

[ng8264723]

I paid for most of my car in cash. I actually put $20 on a HELOC. I have paid it down to $15 and will have it paid off in a few months. I have $74 on the HELOC but most of it ($54) is for home improvements. In my field though I can afford to pay it down fairly quickly. I have as much OT as I need. I didn't want to wait anymore on the car.
chris

[Dingocooke]

My opinion pretty much all debt is bad debt for the borrower; if you borrow money to buy a non essential toy; the mental burden of the debt usually lasts longer than the joy of owning the toy.

As others have said, if you cant afford to pay for it, then you cant afford it.

Mind you the current situation is not all about sub prime loans; the banks and financial institutions have been stupid on many levels; too many credit card approvals to people who cant afford to pay, and way too much risky trading with bank (aka your savings) funds; why else are most of the major world banks begging for state bail outs?

My toys, paid for cash after long saving and building up to the stuff I have now; hard work feels better than instant finance; but maybe Im old fashioned!

Remeber though, even paid for cash its no investment. If I borrowed money for a Kirkham (or whatever) I wouldnt be able to look at it without feeling the debt burden; borrow in haste regret for years? Probably.

My take? There are some great bargains around used, and logic says there will be some reall steals as the situation really bites; look into your finances and what you can really afford to spend (not borrow) and go from there.

Probably not what you wanted to hear, but thtas how I see it; have fun and hope you make a decision you are happy to live with.

Steve

[392cobra]

3rd Sell the car ???

[mln385]

If you are in scenario #2 you don't have to only #1 and even that may not help as we all know selling these Toys when you obsolutely have to isn't a very good position to be in.

[mln385]

Well there are cd's that don't have early withdrawl penalty's I would not nor did I recomend the 401k route, and 100k in the bank at least for me would carry myself for quite some time if needed.

Can't speak for others here but 100k isn't pocket change in my arena.
I am confident in the route I took and no I don't live week to week or paycheck to paycheck.

[JWilly]

This is a wierd thread, but I like it! I'm learning a lot of financial "stuff". I hope this advice is as sound as much of the other advice I have seen on this thread.

[patrickt]

Originally Posted by JWilly

I hope this advice is as sound as much of the other advice I have seen on this thread.

Mine is.

[mln385]

It is as sound as you are competent, what I mean by that is many of the suggestions in this thread is up to the individual to decide which avenue is best for he or she to use financialy and personaly.
Everyone has a different opinion or position.

Read this link http://money.cnn.com/2008/10/24/news...look/index.htm
To me this is why it is better to finance with a tax deductible loan at this time and leave your own money or assets alone.

However as you can see others disagree, not that they are wrong it is just how they feel.

The individual needs to educate themselves on the financial goals and tools available to themselves and make their determination of what to do on their own.

If you already have a mortgage,college tuition,car loans etc. Then ask yourself do you or can you afford this.

Marc

[RodKnock]

Now where did I put that Rembrandt and those Canadian Mapleleafs? There here somewhere.