Financing Options

[1ntCobra]

Originally Posted by eschaider

Something being missed here is that if you do not have the free cash on hand to purchase a high-priced toy, buying it with a loan against anything as in your house, is going to be a tough to sell to creditors.

The free cash available in most all households today would be inadequate to float a $100K loan on a 20-year timeline. $100K @ 20 years works out to a little over $775 per month at a currently optimistic 7% interest. If the rate goes to 9% the monthly burden becomes $900 per month.

I suspect the statistically average household would be hard-pressed to find a reliably recurring $800/$900 of free cash flow each month for this loan. Even if you could, don't forget the operating expense of a Cobra (Insurance, gas etc) still needs to be added in.

If that isn't enough, then remember all the unexpected extra dings your wallet takes for toy enhancements, normal wear and tear, and of course, abnormal wear and tear.

"Yes" you say, "but I don't need to buy a $100K car. I can be easily satisfied with a $35K car." Not true! That is the path to a $135K car.

If you have the free cash and you want one go for it. If you don't, buy another set of very high-end golf clubs and enjoy the links. You'll be money ahead and still have a decent time.

Just for the heck of it, I went to a Ford dealer website to check out what it would cost for a new F-150 truck. I picked one for around $62K. I think it was over $1100 a month to finance at 9.9% for 7 years. Good thing I am not buying a new truck.

Yeah I think the $35K Cobra replica is probably a money pit, but you don't need to go to $100K either to get a nice car.

Here's is what appears to be a nice ERA with a price similar to the new F-150 truck I mentioned: https://bringatrailer.com/listing/1964-era-cobra-4/

This one looks really nice too, but is a bit higher at $72K: https://bringatrailer.com/listing/40...d-era-289-fia/

[Unique427]

Bill Lumbergh from OFFICE SPACE builds a Cobra.

[eschaider]

Originally Posted by 1ntCobra

Just for the heck of it, I went to a Ford dealer website to check out what it would cost for a new F-150 truck. I picked one for around $62K. I think it was over $1100 a month to finance at 9.9% for 7 years. Good thing I am not buying a new truck.

Yeah I think the $35K Cobra replica is probably a money pit, but you don't need to go to $100K either to get a nice car.

Here's is what appears to be a nice ERA with a price similar to the new F-150 truck I mentioned: https://bringatrailer.com/listing/1964-era-cobra-4/

This one looks really nice too, but is a bit higher at $72K: https://bringatrailer.com/listing/40...d-era-289-fia/

When I bought my SPF, I paid either $35K or $36K (I can't remember which anymore) for just the roller. The same car today with the top, front & rear bumpers, mats, car cover, etc. (all of which I bought at the $35K price point) will take you into the mid to high 50s before you begin the drivetrain.

An FE crate engine, with a warranty, from Roush will cost you between $30K and $45K, depending on how you spec it out. Pick the middle of the road, and the engine price tag is $37K. A Quicktime bell housing is $800, and a Tremec TKX, with a shifter, is another $3K.

Before we get to any of the expensive AN hardware and plumbing or fuel pumps, you are already at $94K ($54k + $37k + $3.8k, more than $ 100K when you add tax), and you haven't bought tires, or fuel system plumbing, or fuel pumps or ...

It is tough to build a nice replica for less than $100K today. You can cut corners and certainly try, but you will likely be envious of the 'other guys' with the 'more period correct' versions of the car when you're done, and then you will start spending once again. Alternatively, you might sell yours (at a high probable discount to what you paid for it) and buy a more period-correct car for $100K+. If you do, don't forget to add to that the price of the bath you took when you sold the one you should not have bought in the first place. Now, we are well over the $100K price point.

Dumb mistakes and false economies embraced on the front end of one of these adventures carry extremely high price tags on the back end. Don't try to short-circuit the basics of Cobra Replica acquisition. You will not be happy; ultimately, you will spend more money and not have what you thought you were originally bargaining for.

For those readers who are contemplating this sort of adventure, you should know that there will be others who are going to disagree with my argument. In the end, it is your money and, ultimately, your decision — choose wisely!

[twobjshelbys]

Originally Posted by eschaider

For those readers who are contemplating this sort of adventure, you should know that there will be others who are going to disagree with my argument. In the end, it is your money and, ultimately, your decision — choose wisely!

Completely agree. The lower tier cars are now selling at the same level that I paid for my CSX in 2008...

Building is an open ended money pit. You're much better off buying an already finished and sorted car.

[patrickt]

Originally Posted by twobjshelbys

You're much better off buying an already finished and sorted car.

Unless you want the car built exactly the way you want it, in every respect, and you don't care about the cost and you have no plans to ever part with the car... other than when you part with everything else in this world.

[twobjshelbys]

Originally Posted by patrickt

Unless you want the car built exactly the way you want it, in every respect, and you don't care about the cost and you have no plans to ever part with the car... other than when you part with everything else in this world.

The typical person inquiring here has no such aspirations. Your group have already done their research (probably by READING the topics here first).

[CompFi]

Lots of good advice above from those with much more experience than me. Certainly not intending to contradict any of the above counsel

But simply answering the question as posed in the OP.

A possibility that I did not see mentioned above, Have you tried your credit union? Your credit union MIGHT offer you A comparable rate for an unsecured loan As you might get on a Home equity line of credit from a Traditional bank

And that approach will not get you in hot water With the taxman.

But your interest rate will largely depend on your overall credit history and your history with the particular credit union.

May the Force be with you (as you will probably need it)

[1795]

Of course, you could always take out a loan against your 401K if you had one with enough money in it. Then, you would be paying yourself the interest. However, there may be limits on how much you can borrow from it and the term is usually short.

[patrickt]

Originally Posted by CompFi

Lots of good advice above from those with much more experience than me.,,

Yeah, maybe rethink selling a kidney....

[FredG]

I looked at 2 companies when I purchased my Backdraft 5 years ago. Woodside and Lightstream. I eventually settled on Woodside. They made the process easy and uncomplicated.

Fred

[1ntCobra]

Originally Posted by 1795

Of course, you could always take out a loan against your 401K if you had one with enough money in it. Then, you would be paying yourself the interest. However, there may be limits on how much you can borrow from it and the term is usually short.

I do not recommend taking a 401K loan unless you are certain you plan on staying with the company and you are sure that the company is doing well. I took a 5 year 401K loan a bunch of years ago to pay for part of my divorce. I planned on staying with the company and thought the company was stable. I was about half way thru the loan term when the small company I was working for ended up un-expected laying off most of the employees. I think there is a grace period to pay the balance back in full when your employment ends. If you do not pay the balance back in that time frame, the balance due will then be considered a distribution to be taxed as income with a 10% penalty.

[1ntCobra]

Originally Posted by CompFi

Lots of good advice above from those with much more experience than me. Certainly not intending to contradict any of the above counsel

But simply answering the question as posed in the OP.

A possibility that I did not see mentioned above, Have you tried your credit union? Your credit union MIGHT offer you A comparable rate for an unsecured loan As you might get on a Home equity line of credit from a Traditional bank

And that approach will not get you in hot water With the taxman.

But your interest rate will largely depend on your overall credit history and your history with the particular credit union.

May the Force be with you (as you will probably need it)

I think an unsecured loan will always be higher interest rate than a Home equity line of credit.

If you use part of your home equity line of credit for non-house things, you can report that on your taxes correctly without getting into hot water with the IRS. When I was doing my taxes last year I recall TurboTax asking me questions about what I was using my home equity line of credit for.

[eschaider]

The rate a lender charges is tied to the cost of money as set by the Fed at the time of the loan and the lender's perceived risk that the borrower would/will default. The reason secured loans have lower rates is that the value of the security that is pledged is typically greater than the amount being borrowed.

If the borrower’s liquid net worth is substantially greater than the loan amount, the risk is low, and so is the rate. If not, then not. Of course, if you have a substantial net worth, you would not need the loan in the first place, which brings us back to the risk factor(s) associated with default.

[Fenmyrch Fie]

Originally Posted by eschaider

When I bought my SPF, I paid either $35K or $36K (I can't remember which anymore) for just the roller. The same car today with the top, front & rear bumpers, mats, car cover, etc. (all of which I bought at the $35K price point) will take you into the mid to high 50s before you begin the drivetrain.

An FE crate engine, with a warranty, from Roush will cost you between $30K and $45K, depending on how you spec it out. Pick the middle of the road, and the engine price tag is $37K. A Quicktime bell housing is $800, and a Tremec TKX, with a shifter, is another $3K.

Before we get to any of the expensive AN hardware and plumbing or fuel pumps, you are already at $94K ($54k + $37k + $3.8k, more than $ 100K when you add tax), and you haven't bought tires, or fuel system plumbing, or fuel pumps or ...

It is tough to build a nice replica for less than $100K today. You can cut corners and certainly try, but you will likely be envious of the 'other guys' with the 'more period correct' versions of the car when you're done, and then you will start spending once again. Alternatively, you might sell yours (at a high probable discount to what you paid for it) and buy a more period-correct car for $100K+. And do not forget that all these movements of money will be accompanied by bank commissions if you pay by card. I read in one blog that this can be avoided if you use account-to-account payments. But for that, the seller needs to have such an option available. If you do, don't forget to add to that the price of the bath you took when you sold the one you should not have bought in the first place. Now, we are well over the $100K price point.

Dumb mistakes and false economies embraced on the front end of one of these adventures carry extremely high price tags on the back end. Don't try to short-circuit the basics of Cobra Replica acquisition. You will not be happy; ultimately, you will spend more money and not have what you thought you were originally bargaining for.

For those readers who are contemplating this sort of adventure, you should know that there will be others who are going to disagree with my argument. In the end, it is your money and, ultimately, your decision — choose wisely!

Yeah, this is definitely not a purchase you should make with a loan if you're trying to save money. Buying toys on a loan is always a bad idea