Need advice on buying a Kirkham cobra

[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.

[jhv48]

Originally Posted by mln385

Exactly.....

use the tools of finance to your advantage....
Here are 2 scenarios.

1 an individual has the cash to buy a 100k car plus say 10% extra for unforseen issues.
So they buy the car and have 10k left over,said person then looses job or becomes seriously ill and can't work for months no income.
Now said person goes thru said 10k left over in a couple months and is now broke can't pay bills what does he do??

2 nd individual has the cash to buy 100k car but elects to keep it invested or in a cd, takes out "fixed" equity loan which is also tax deductable.
So they buy the car said person then looses job or becomes seriously ill and can't work for months no income.

However said person has the 100k in bank or security's to ween off of untill things get better.

I ask you who is better off in this situation 1 or 2??

Let's use number two as an example:

Loses job and has to draw money out of investments (like now? Not a good idea?) or 401k or CD's (both have subsantial penalties and tax consequences, not to mention may take a serious loss on 401k investments to boot). And because of the economy, he's unable to sell the car for what he owes and get out from under the equity loan on the house. Is this scenerio beginning to sound familiar?

So, now he can't sell the car for what he owes, is faced with a loss and taxes on whatever he must liquidate in order to make his house and equity payments and if it runs out. HE STILL LOSES HIS HOME!

However, if he had gotten an AUTO loan to buy the car and his world tanked. He could (worst case again) give it back to the bank (voluntary repo) and use whatever assets he has left to keep him afloat a little longer.

Net worth in this day and age means nothing if that worth is all on paper (equity of a home, rental property, business property, hard assets like art or coins, classic cars, etc). If it is comprised of liquid assets then it is meaningful.

It's how much cash you can get your grubby hands on RIGHT NOW (without trying to liquidate assets) that really matters. Try to sell your rental property in this market and what do you get. Probably next to nothing. Doesn't help does it?

That's why cash is king! Money tied up in assets is worthless in this economy.

It' good to be the King!

And by the way, in either scenerio, he can sell the car and recover SOME of the $100grand. In scenerio one, he just loses some cash. In #2, he can lose his home.

You decide!

[patrickt]

If the individual went with Benny the Loan Shark, he would get his car, keep his bank account intact, and if did lose his job he could work with Benny to move a couple of kilos up the I-95 corridor in lieu of having to pay Benny back right away. C'mon, he could even use the Cobra for the Miami to NY run. That's clearly the way to go.

[jhv48]

Originally Posted by patrickt

If the individual went with Benny the Loan Shark, he would get his car, keep his bank account intact, and if did lose his job he could work with Benny to move a couple of kilos up the I-95 corridor in lieu of having to pay Benny back right away. C'mon, he could even use the Cobra for the Miami to NY run. That's clearly the way to go.

See! I knew we could find a solution that we all could agree on!

[RodKnock]

Originally Posted by jhv48

Let's use number two as an example:

Loses job and has to draw money out of investments (like now? Not a good idea?) or 401k or CD's (both have subsantial penalties and tax consequences, not to mention may take a serious loss on 401k investments to boot). And because of the economy, he's unable to sell the car for what he owes and get out from under the equity loan on the house. Is this scenerio beginning to sound familiar?

So, now he can't sell the car for what he owes, is faced with a loss and taxes on whatever he must liquidate in order to make his house and equity payments and if it runs out. HE STILL LOSES HIS HOME!

However, if he had gotten an AUTO loan to buy the car and his world tanked. He could (worst case again) give it back to the bank (voluntary repo) and use whatever assets he has left to keep him afloat a little longer.

Net worth in this day and age means nothing if that worth is all on paper (equity of a home, rental property, business property, hard assets like art or coins, classic cars, etc). If it is comprised of liquid assets then it is meaningful.

It's how much cash you can get your grubby hands on RIGHT NOW (without trying to liquidate assets) that really matters. Try to sell your rental property in this market and what do you get. Probably next to nothing. Doesn't help does it?

That's why cash is king! Money tied up in assets is worthless in this economy.

It' good to be the King!

And by the way, in either scenerio, he can sell the car and recover SOME of the $100grand. In scenerio one, he just loses some cash. In #2, he can lose his home.

You decide!

Worthless? Not where I live and work. Me likes hard assets such as rental property, art, coins, gold, silver, oil, pork bellies, orange juice, etc. Cash is good too.

You're not persuading me and I'm not persuading you. We can all agree to disagree.

[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.

[SP01715]

Originally Posted by RodKnock

So, instead of your house, colateralize the loan with you savings and 401K?

Yes, on floors and caps. Every lender is different and every customer is different. Lending is based on FICO's.

Again, assets minus liabilities equals net worth. We do not have a complete picture of the borrower/Kirkham buyer. So, blame the 98% of the rest of us for the excess of the 2%.

Reasonable and prudent leverage is fine.

A lot of assets became liabilities in the past couple years.

[bnewell]

use your LOC....that is how I bought mine 3 years ago. You only go around once in life, might as well have fun doing it.

Bought mine used, and have lost more in the market than I will lose in the car, plus I'm sure the value of my house is down, but I am having fun!!!

When it is our time to take the "dirt nap"......who really gives a sh!t......enjoy life!!!!!

Brian