Financing your Cobra...Woodside Credit?

[392cobra]

If you can't pay cash...you can't afford it.

[LudicrousSpeed]

Originally Posted by 392cobra

If you can't pay cash...you can't afford it.

True, but absolutely no fun.

[STL Mark]

Most won't finance kit cars. The ones that do will require 20% down, and will only finance a completed vehicle with an appraisal. Capitol One will finance.

I say if you can afford the payments - go for it. Why wait till your an old guy - if you can do it now - do it. It's too much fun.

[patrickt]

Originally Posted by LudicrousSpeed

[If you can't pay cash, you can't afford it.] True, but absolutely no fun.

Mark, I'm not going to bug you about it and, frankly, I don't care whether you get yourself in financial trouble or not. But I will offer up some unsolicited "fatherly advice." If you're dead set on getting a Cobra and financing it, why don't you first try putting your down payment into an interest bearing account and then make the anticipated monthly payments for a year in to that account. You can't miss a single payment (for any reason), and you can't touch that money even for emergencies. If after the end of a year that didn't bother you, then pull the money out and get your Cobra. The year will also give you a chance to shake off a temporary bout of "Cobra-Heat" -- if you haven't shaken it off in a year it's probably the real thing.

[WarrenG]

I had a ton of equity in my house when I bought the cobra, so rather than tie up a bunch of cash in the car, I pulled a 2nd @ 5.5% for it. Also pulled some to completely reform the kitchen and some other parts of the house. Because it was a home loan the interest was fully deductible. Didn't make sense to do it any other way. Sold the house last year and paid off the loan. Still had a ton of equity to take away. It's only money and you can't take it with you!

[Bartruff1]

Originally Posted by WarrenG

I had a ton of equity in my house when I bought the cobra, so rather than tie up a bunch of cash in the car, I pulled a 2nd @ 5.5% for it. Also pulled some to completely reform the kitchen and some other parts of the house. Because it was a home loan the interest was fully deductible. Didn't make sense to do it any other way. Sold the house last year and paid off the loan. Still had a ton of equity to take away. It's only money and you can't take it with you!

Of waiting till I was old and had the cash and had met my responsibilities. It makes sense to me to finance one if you can do it with deductable interest and assuming the payments are not a risk or a burden. These cars are a hell of a lot of fun for the money, I wish I had done it 20 years ago !!!

[patrickt]

LS can post his balance sheet and income statement and we'll play the Club Cobra version of "Can I afford it?" But I doubt he has significant real estate equity any more than he has Berkshire Hathaway certificates that he forgot about stuffed in the back of his sock drawer....

[mln385]

DIdn't we just have one of these threads a few weeks ago.

Bottom line do what ever is best for your circumstances and what you are comfortable with.

Marc

[STL Mark]

I took a year to get debts paid off - that was hard, sold my other toy for the down payment, and ended up financing about 60% of the car. The plan actually saved me money (month to month) and I've got a brand new Cobra.

Cheers

[RodKnock]

Yesterday, the Treasury was selling notes with a ZERO % interest rate.

Today, the Treasury is selling notes with NEGATIVE % interest rate. That means investors are investing cash in order to receive less cash back than what they had originally invested. Sounds like a car purchase.

The prime rate is 4%. Rates should continue to decline.

If you feel secure with your job and you have personal/family balance sheet that looks pretty good, then why not finance.

Where else do you want to put your money?

[STL Mark]

That thars funny I don't care who you are!

[LudicrousSpeed]

Originally Posted by patrickt

Mark, I'm not going to bug you about it and, frankly, I don't care whether you get yourself in financial trouble or not. But I will offer up some unsolicited "fatherly advice." If you're dead set on getting a Cobra and financing it, why don't you first try putting your down payment into an interest bearing account and then make the anticipated monthly payments for a year in to that account. You can't miss a single payment (for any reason), and you can't touch that money even for emergencies. If after the end of a year that didn't bother you, then pull the money out and get your Cobra. The year will also give you a chance to shake off a temporary bout of "Cobra-Heat" -- if you haven't shaken it off in a year it's probably the real thing.

Actually, thats kinda what I'm doing. We're putting away about 1K per month, half that is dedicated to retirement and is untouchable (Roth IRAs and such), the other half is going into short term CD's and is also semi untouchable for the time being. I'm waiting at LEAST a year to build up the savings, and wait on the market.

There will come a point in the Cobra market that waiting & saving will yield diminishing returns. The prices will eventually start to go up again. Thats the sweet spot I'm waiting for. If I can land a nice used ERA or SPF and only finance around 20-25K tops, I've hit my mark.

I'm in the research phase of the process now, and as I come upon stuff, I'll post a question & see what the responses are. I'm in no hurry to spend a ton of $$$. The neat thing is the more I learn, the more nice folks (owners) I meet, the more I find that I like.

My reality is this: I have an Ego, and I have this insatiable need to go fast & pull Lotsa G's. An inverted flat-spin in a Pitts is my idea of a good time. Unfortunately, My budget will not allow for the cost of an Aerobatic airplane, hangar space, insurance, fuel & maintenance. Plus, nobody in my family really likes to fly, ESPECIALLY the way I like to fly. I gave up motorcycles because, after scraping up the umpteenth motorcyclist from the road, there was no way I was gonna put my wife or kid in the back of my bike again, and riding alone kinda sucks.

The Cobra fills the bill for my Ego & familial involvement, and I can kinda afford it to.

[snakebitekit]

The way most people make their money is by OPM, "other peoples money". As long as you can make the payments without hurting the family budget go for it. I would rather have the money in the bank and use OPM to buy. Besides the interest is deductble.

SBK

[SP01715]

Originally Posted by snakebitekit

The way most people make their money is by OPM, "other peoples money". As long as you can make the payments without hurting the family budget go for it. I would rather have the money in the bank and use OPM to buy. Besides the interest is deductble.

SBK

The problem with that is if your financial situation changes and you can't make the payments you are screwed. I know plenty of people in the recent years that have bought cars, boats etc with little money down, and now they are upside down on these liabilities. Now their incomes have gone down and they can't even sell these toys for what they owe on them. The next step is the banks taking the stuff back and you get nothing except screwed up credit.

There are two sides to your argument. I have a Harley, a 49 Caddy, a boat, and the Cobra that are all payed for. If the crap hits the fan I can dump these items for some cash instead of having them taken back by the bank. My.02

[patrickt]

Originally Posted by LudicrousSpeed

There will come a point in the Cobra market that waiting & saving will yield diminishing returns. The prices will eventually start to go up again. Thats the sweet spot I'm waiting for. If I can land a nice used ERA or SPF and only finance around 20-25K tops, I've hit my mark.

That's certainly reasonable. You don't have to time the market perfectly (be it Cobras, stocks, or anything else); I think prices now are pretty good. And you'll be surprised how quickly you can spend a few grand on absolutely nothing with these cars. Seriously though, I will tell you that I have had (and continue to have) more fun with my Cobra than anything else I have bought in my life. I actually get pleasure from it just knowing that it's sitting in the garage, which is a little nutty -- kind of like posting seven thousand messages to a stupid car forum.

[Got the Bug]

Originally Posted by patrickt

I think prices now are pretty good. And you'll be surprised how quickly you can spend a few grand on absolutely nothing with these cars. Seriously though, I will tell you that I have had (and continue to have) more fun with my Cobra than anything else I have bought in my life. I actually get pleasure from it just knowing that it's sitting in the garage, which is a little nutty -- kind of like posting seven thousand messages to a stupid car forum.

Prices are looking pretty good right now. My SWAG is that you may find some of the best deals at the end of the summer in 2009.

[LudicrousSpeed]

Originally Posted by patrickt

That's certainly reasonable. You don't have to time the market perfectly (be it Cobras, stocks, or anything else); I think prices now are pretty good. And you'll be surprised how quickly you can spend a few grand on absolutely nothing with these cars. Seriously though, I will tell you that I have had (and continue to have) more fun with my Cobra than anything else I have bought in my life. I actually get pleasure from it just knowing that it's sitting in the garage, which is a little nutty -- kind of like posting seven thousand messages to a stupid car forum.

Yep, when I had the Harley I could polish it for hours, then stare at it for a few more. Wasted alot of time thumbing through all the parts mags for the next thing I was gonna put on it. I only gave it up out of pure consideration for the family. My wife totally understands, and is behind me on this because she knows how much I loved & miss the Hog, and am not flying much anymore, which was my first passion.

[Great Asp]

Originally Posted by 392cobra

If you can't pay cash...you can't afford it.

Smart use of credit is.......smart.

I know a guy that did real well "borrowing" money.....Bill Gates

E

PS I would not buy a kit car on a loan