Need advice on buying a Kirkham cobra

redd · #1 (**permalink**) 10-21-2008, 04:58 PM

Since my 401k is sinking im thinking of using a line of credit to buy a Kirkham i know the good part is you can write off the interest the bad part is you not paying down the principel but you can add money on some loans . good idea or bad ? Any ideas on this would be helpful? Thanks Jeff

ENTDOC · #2 (**permalink**) 10-21-2008, 05:17 PM

save up and pay cash

RedBarchetta · #3 (**permalink**) 10-21-2008, 05:22 PM

Jeff,

1. Assuming this line of credit is a HELOC (i.e. tied to 2nd TD). Otherwise, any interest deduction is illegal.
2. Don't understand your logic of a sinking 401k = time to borrow money.
3. NEVER view a replica of ANYTHING as a safe haven to preserve capital.
4. HELOCs are usually tied to indexes or Prime or LIBOR (i.e. variable rate). It's only going to go up once the real recession hits and inflation takes over.
5. These cars are more wants than haves.

As much as I'd like to see Kirkham sell a gazillion of their wonderful cars, I'd personally keep my powder dry and/or wait for some really low bargains when a few owners will get stretched thin over the coming months and you can find a deal on a well cared for pre-owned model. Or alternatively save the cash and plunk down on a new one.

My $0.02 and it's worth about half that on a good day.

-Dean

RodKnock · #4 (**permalink**) 10-21-2008, 05:31 PM

I think it all depends on the rest of your financial (net worth or assets minus liabilities) and employment picture. From the limited amount of info, using your LOC to buy a Kirkham seems fine to me.

bnewell · #5 (**permalink**) 10-21-2008, 05:55 PM

I agree with RodKnock

Brian

392cobra · #6 (**permalink**) 10-21-2008, 06:25 PM

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

Lew Ledyard · #7 (**permalink**) 10-21-2008, 07:59 PM

[deleted]. The avitart above distracted me too much to write anything of value.

Moderator - pls delete my post.

olddog · #8 (**permalink**) 10-21-2008, 08:17 PM

To some degree it depends on your time horizon (how many years until you retire).

It also depends on what you were invested in when the market went down.

If you were mainly in stocks (assuming you road the market down) and you have 20 +/- years until retirement, it is foolish to pull money out now. If you sell your stock now, you lock in the loss forever. If history repeats (and it usually does) sometime in the next 10 years the market will come back strong with double digit gains and you will miss out on it.

Even if you figure a modest 6% average anual gain over 20 years your money will grow 320%. A more typical 8% would give you 466%. So if you pull out $100,000 now, it could cost you a half a million when you retire. Your actual experiance may vary and past performance does not garantee $hit. You get the picture.

If you were close to retirement, you should have been mostly invested in more secure things, as you do not have time to recover from what just happened.

olddog · #9 (**permalink**) 10-21-2008, 08:27 PM

Quote:

Originally Posted by redd

Since my 401k is sinking im thinking of using a line of credit to buy a Kirkham i know the good part is you can write off the interest the bad part is you not paying down the principel but you can add money on some loans . good idea or bad ? Any ideas on this would be helpful? Thanks Jeff

Money paid in interest on a loan out of a 401K is not tax deductable.

If you borrow the money for say 10 years you lock that amount of money into recieving what ever rate of return your loan is.

If you are sure the market will not come back up for the time of the loan (and you are correct). then the interest you pay back to your 401K would be a better deal than leaving it in the market.

If you are wrong, you could loose a lot of money.

SLHetal · #10 (**permalink**) 10-22-2008, 04:51 AM

In your case "patience is a virtue" is a most applicable statement. If you can hold your horses for about six months or so, you may find that things have come to you in spades. Cash is king in this environment. Non essentials will continue to devalue with this recession requiring plenty of re-evalution of priorities. The short answer is that you may get a much better deal next year and you may find a way not to encumber your real estate with a HELOC.
Sam

jhv48 · #11 (**permalink**) 10-22-2008, 07:49 AM

He isn't saying he is going to take the $$$ from his 401k. He just says that it is tanking.

He is saying (I think) that he wants to use his home equity to purchase a Kirkham.

Am I right so far?

If you take $$ out of your 401k, you will pay a 10% penalty for early withdrawal and you will be taxed on the money at the end of the year. NEVER a good idea to tap into a 401k to buy a toy.

Tapping into your home equity to buy a toy is what got America into the mess it is in today. Gotta have it now and will gamble my home in order to get it.

If your financial situation is that good, you obviously have the cash laying around to pay all cash for the Cobra.

If it isn't that good, start saving and look for a good used one in the next year and pay cash.

If none of the above are applicable, you probably can't afford to buy the car. It's ok to put off toy buying until you can afford it.

Hexnut72 · #12 (**permalink**) 10-22-2008, 08:14 AM

Do it! Buy now, you never know what tomorrow will bring. You don't want to be one of those guys saying "I wish I would have......"

redd · #13 (**permalink**) 10-22-2008, 08:18 AM

i am retired my 401 money if i used it would be taxed as normal income . i just dont want to use to buy the car. also my house is paid off.

Hexnut72 · #14 (**permalink**) 10-22-2008, 08:41 AM

Well, you gotta do it then!

Jamo · #15 (**permalink**) 10-22-2008, 09:43 AM

Next, I think you should ask your local dope dealer if you should try meth.

xlr8or · #16 (**permalink**) 10-22-2008, 09:46 AM

Keep an eye on the for sale section here and cobracountry.com and see if you find one you like. If not just call Kirkham tell them what you want and order it.

jhv48 · #17 (**permalink**) 10-22-2008, 10:32 AM

Since you are retired, I would not take money out of the house for a toy purchase. Nor would I tap into a 401k unless you have to in order to survive.

If you do not have the cash to buy it outright, you might not be able to afford it. I wouldn't advise you to place your home in jeopardy by taking out a heloc. Those interest rates are adjustable monthly and will climb as the economy recovers. Save that money for an emergency.

Cash is the only way to go. And the attitude of anyone that says "buy it now no matter what" is what got Americans into the financial fix they're in right now.

Cash is king. "It's good to be the King"

Signed,
the voice of reason

FatBoy · #18 (**permalink**) 10-22-2008, 10:52 AM

I certainly wouldn't risk everything to buy a toy, but I see no reason why you shouldn't risk as much as you can afford to lose to get it.
As has already been said, you never know what tomorrow will bring and come the day of judgement, you don't want in a position where you're regretting not having done all manner of things.
I had a serious health scare a few years ago and it does give you a different perspective on these things.

Paul

HI Cobra · #19 (**permalink**) 10-22-2008, 11:37 AM

Spend some time doing two things -
1) research what you want in the Kirkham and how you want it built to suit
you - don't rush.
2) Set your limit on what you want to pay and start saving/allocating the $
to achieve this goal.
Watch what is happening on the market so you are familiar with it and wait.
If you can't wait for "the deal" make your own with the Kirkhams.

Took me about 5 years but well worth the wait.

Lew Ledyard · #20 (**permalink**) 10-22-2008, 12:04 PM

In order to make this thread "fair and balanced

":

GO FOR IT!!!