Financing Options

hitechv · #1 (**permalink**) 12-11-2023, 09:49 AM

Hi folks - anyone have experience with financing a Cobra purchase - who is willing to do such financing (for a CSX, BDR, FFR, and other builds), and who seems to have the best rates? Thnx.

twobjshelbys · #2 (**permalink**) 12-11-2023, 11:31 AM

I would say that your chances of getting a kit financed are pretty low. The bank will want a marketable title to hold as collateral.

A completed used car could probably be financed. I'm not sure I'd want to see the interest rate.

Can't say about local banks and credit unions but you might check with some of the specialty insurance companies like Grundy to see if they have recommendations. I think barrett jackson also has a link

Now let me be honest with you. I'm 71 now and learned A LOG TIME AGO never to borrow money for toys. It's OK to leverage - ie, borrow at a lower rate rather than liquidating investments that return more than the interest rate, but going flat out into debt for a car that will eventually be driven once a month is a bad financial move.

eschaider · #3 (**permalink**) 12-11-2023, 11:55 AM

Plus 2, from another old geezer ...

1795 · #4 (**permalink**) 12-11-2023, 02:07 PM

If you are set on taking out a loan, and it is the only way to have your dream of owning a cobra replica, then the best bet would be to take out a home equity loan if there is enough equity in your home. At least you will be able to write off the interest. I don't see too many lenders risking a loan on a pile of stuff that needs to be assembled before they can get their money back if you default.

It is a risk and if you do not complete it you will still have that monthly payment to remind you of it.

twobjshelbys · #5 (**permalink**) 12-11-2023, 02:13 PM

Quote:

Originally Posted by 1795

If you are set on taking out a loan, and it is the only way to have your dream of owning a cobra replica, then the best bet would be to take out a home equity loan if there is enough equity in your home. At least you will be able to write off the interest. I don't see too many lenders risking a loan on a pile of stuff that needs to be assembled before they can get their money back if you default.

It is a risk and if you do not complete it you will still have that monthly payment to remind you of it.

As I said, I know of no bank that will loan on a kit - they know that too many of these projects are never completed and since there is no title for security won't do a secured loan. If you have credit good enough to get a 50K unsecured loan then you don't need the loan.

Technically the interest on a home equity loan is tax deductible only if the proceeds are used for home improvements.

eschaider · #6 (**permalink**) 12-11-2023, 02:29 PM

If you have to borrow to build/acquire it, then it is the WRONG thing to do!

Mark IV · #7 (**permalink**) 12-11-2023, 02:32 PM

There are several lenders who will finance a "Cobra", but none that do a "kit". A lender needs a serviceable lien on a title and a kit has no "title". We have had customers who used an equity loan to bridge the time from a "build" to "complete, title" in hand that the lender can use.

Cashburn · #8 (**permalink**) 12-11-2023, 03:15 PM

We have lenders that can work with us on a build.

mrmustang · #9 (**permalink**) 12-11-2023, 03:38 PM

Quote:

Originally Posted by hitechv

Hi folks - anyone have experience with financing a Cobra purchase - who is willing to do such financing (for a CSX, BDR, FFR, and other builds), and who seems to have the best rates? Thnx.

OK, I'll say it, if you want it now, but don't have the cash saved, wait until you do. Find a side job, sock that money away in a toy fund, do not touch your regular savings, and do not take out a loan.

Nothing worse then going in to debt for a toy.

Enough said.

Bill S.

patrickt · #10 (**permalink**) 12-11-2023, 03:43 PM

Ehhhh, raid the children's college fund and buy the car. Then when they're in about 11th grade start buying PowerBall tickets with all your excess funds. If that fails, you can always fly to Mexico and sell a kidney. You have options.

sunman · #11 (**permalink**) 12-11-2023, 09:16 PM

Remember back in the good ole days when you could get a kit in 3 phases…
Oh, never mind

1ntCobra · #12 (**permalink**) 12-12-2023, 10:59 AM

Quote:

Originally Posted by patrickt

Ehhhh, raid the children's college fund and buy the car. Then when they're in about 11th grade start buying PowerBall tickets with all your excess funds. If that fails, you can always fly to Mexico and sell a kidney. You have options.

Hmm, I have enough money in my kids' 529 accounts to do that ... but that's not happening!

1ntCobra · #13 (**permalink**) 12-12-2023, 11:20 AM

Quote:

Originally Posted by 1795

If you are set on taking out a loan, and it is the only way to have your dream of owning a cobra replica, then the best bet would be to take out a home equity loan if there is enough equity in your home. At least you will be able to write off the interest. I don't see too many lenders risking a loan on a pile of stuff that needs to be assembled before they can get their money back if you default.

It is a risk and if you do not complete it you will still have that monthly payment to remind you of it.

As someone who apparently has hundreds of thousand in home equity and has a home equity line of credit, I have occassionally considered it is possible to purchase a Cobra replica, like an ERA (or more likely an FFR) with my line of credit and have a reasonable monthly payment. But then I remind myself that I have 1 kid that just finished college and another one still in college and decide it is not a good idea at least for now.

I also understand that home equity loan interest not used on the house is not deductible. And that is easy enough to report on the tax return correctly.

Something that seems more realistic is in a few years when both kids are done with college and out on their own is to downsize the house and cash out some of the equity without the need for a loan.

eschaider · #14 (**permalink**) 12-12-2023, 11:46 AM

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.

patrickt · #15 (**permalink**) 12-12-2023, 12:00 PM

If I were with the financing company, and this was your first Cobra, I would insist on placing a term life policy on you for the face value of the loan.

Unique427 · #16 (**permalink**) 12-12-2023, 12:40 PM

Quote:

Originally Posted by patrickt

If I were with the financing company, and this was your first Cobra, I would insist on placing a term life policy on you for the face value of the loan.

Imagine this guy as a loan officer ..............

cycleguy55 · #17 (**permalink**) 12-12-2023, 02:13 PM

Quote:

Originally Posted by twobjshelbys

As I said, I know of no bank that will loan on a kit - they know that too many of these projects are never completed and since there is no title for security won't do a secured loan. If you have credit good enough to get a 50K unsecured loan then you don't need the loan.

Technically the interest on a home equity loan is tax deductible only if the proceeds are used for home improvements.

If the car is in the garage how is that not a home improvement? LOL

sgianino · #18 (**permalink**) 12-12-2023, 04:49 PM

Quote:

Originally Posted by unique427

imagine this guy as a loan officer ..............

:lol::lol::lol:

1ntCobra · #19 (**permalink**) 12-12-2023, 07:10 PM

Quote:

Originally Posted by patrickt

If I were with the financing company, and this was your first Cobra, I would insist on placing a term life policy on you for the face value of the loan.

I think stated value or agreed value insurance might be needed for a Cobra replica if you were financing it with some sort of car loan.

chucks1 · #20 (**permalink**) 12-12-2023, 07:45 PM

When I bought my SPF in 2010 I also had an '07 GT500 with a clear title. I took out a loan on the GT500 and filled in the remainder with cash.

I recollect no one volunteering to give me a loan on a car that, while complete, had an MSO but no title. I also recollect that I was going to do whatever I had to do - within some semblance of reason - to get that toy into my garage.