Cobra Financing

[patrickt]

Originally Posted by madmaxx

I used to be of the mindset, if you cannot pay cash then do not buy it. After the miserable performance in the DJIA and NAsdaq, inflation about to sky rocket, there are worse ways to spend you money then a Cobra. They do retain their value better than other toys. If you can get a good interest rate, go for it, if it dont work out sell it and move on. Life is to short!!

If the goal is to make money, buying a Cobra on credit ain't the way to do it. If the goal is to just have fun with a Cobra while you can, then by all means buy it on credit. Yes, you are pi$$ing money away on interest -- that's absolutely undeniable. But more people than not would probably say that just buying a Cobra with cash is pi$$ing money away. So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless.

[madmaxx]

So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless

Not necessarily. I am confident if I listed my SPF for sale for $30K I would sell it in hours. If I listed for $40K may take a couple days. If I listed for $50K, maybe a month, for $55K maybe all summer. As you can see a Cobra does retain value. The last one I bought for $28K and sold for $37K in 7 hours. In reality the opportunity cost for my SPF is only $33K. This is based on the fact that the funds that I sold to buy the SPF are worth substantially less today.

Originally Posted by patrickt

If the goal is to make money, buying a Cobra on credit ain't the way to do it. If the goal is to just have fun with a Cobra while you can, then by all means buy it on credit. Yes, you are pi$$ing money away on interest -- that's absolutely undeniable. But more people than not would probably say that just buying a Cobra with cash is pi$$ing money away. So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless.

[patrickt]

Originally Posted by madmaxx

In reality the opportunity cost for my SPF is only $33K. This is based on the fact that the funds that I sold to buy the SPF are worth substantially less today.

OK, so I could say that "but for the fact that I bought my ERA, I would have purchased GM Bonds, thus the true cost of my Cobra is next to nothing." You get an A+ for creative thinking....

[madmaxx]

If it was creative thinking I wish I would have known at the time, I would have been better off buying 10 spf cobras a year ago as compared to what the account is now worth.

Originally Posted by patrickt

OK, so I could say that "but for the fact that I bought my ERA, I would have purchased GM Bonds, thus the true cost of my Cobra is next to nothing." You get an A+ for creative thinking....

[patrickt]

Originally Posted by madmaxx

If it was creative thinking I wish I would have known at the time, I would have been better off buying 10 spf cobras a year ago as compared to what the account is now worth.

No, if you had known at the time then you would have called up your broker and said "Bennie, I'm feeling lucky -- everything I got goes in to Put Options." Had you done that, you would now be in a position to invest in a real Cobra.

[madmaxx]

LOL!!!!!!!!! and how true.

Originally Posted by patrickt

No, if you had known at the time then you would have called up your broker and said "Bennie, I'm feeling lucky -- everything I got goes in to Put Options." Had you done that, you would now be in a position to invest in a real Cobra.

[WarrenG]

When I bought my Dodge Durango, I refinanced the house, got a lower interest rate and the payment was well within our ability to pay. I just figured out how much more I had to pay to pay off the truck in 2-3 years and the interest was tax deductible. When I bought the Cobra, I took out a second on the house. Because we'd been in the house so long, my new payment was still well within our income, in fact we could probably still have made the payment with only one income. Interest was 5.5% and tax deductible. I still think both were worth it so I could drive it now rather than waiting. If you can afford it finance it.

Because I took out the second when I ordered the car, I had the money available to make the progress payments when they were due. In between the money stayed in fixed investments making approx 4% so my net was 1.5%. By writing off the loan interest and claiming the earned interest, my net was still around 1%.

Hagerty... They won't insure the cars, but you telliing me they'll finance them?