Loans for your projects???

[67turbostang]

After years of working on my car and dealing with setbacks(financial and time) I decided that I am getting a loan to finish my build or at least get it closer to being complete. I'm at a point where I can afford it, so it seems logical.

How many of you fellow members have taken out loans for projects? I would like to here your input

[AMSOILGUY]

Most people are going to say its a bad idea! I've done it before mostly for key items though not a whole build. I just work at paying it off much faster then the full term to help not pay as much interest. I have an account with Navy Federal and they pay 250 dollars to refinance an auto loan. So I use a local bank or lendor and then before even making a payment I switch it to Navy Federal and always get a better rate and they pay me to take the note.
For instance I needed 3 grand so I called my local bank got a loan on a vehicle I owned and in no time at all I had the money in my account with an interest rate that was not great. So then I refinanced it with Navy federal they pay me 250 bucks and give me a good rate on a used car 2.59 so its like $2.50 day but I pay it off in 3 months and the interest was equal to the 250 bucks I recieved so basically its a wash for me. You must be careful though because if you are barrowing alot it won't happen like that or if you don't pay it off early.

[MattO]

Don't.

[Streetking]

Don't.

I agree. It's too easy to get a loan and build your car. Wait until you can save enough up or buy parts as you can afford.

[randy]

Only way i would do it is if you thought it would take you 10k to finish your car. You have the 10k in the bank but dont want to take that lump some out. Borrow the money only if the interest rate is low and at most your loan only costing you under 1k over the mature date. remember at anytime you can pay it off right away without strapping you for cash.

[patriot68]

pay as you go

[srh3trinity]

I always say pay cash for toys. You could consider taking out a loan against your savings if you use a credit union. Mine offers that as an option and the rates are usually lower than a private loan. Our Credit Union also gives you some life insurance on the loan too.

[mdprovee]

I have done it, a home equility loan. It wasn't a good idea especially with cost over runs, and now the housing market. Now I have a "car payment" for 10 more years, unless I pay it off early, which I am working on.

However, I would not have had the money to save to get it done. I have had an absolute BLAST with this car over the last four years, a few ASCS events, a few autocrosses, and just driving it, sometimes making the car payment woth it.

If you are going to do it, just make sure you can afford it.

[Dayton]

Building a car is a money pit. Taking out a loan is a bad idea.
My 69 took 4 years and 4 months.
Paid cash as I went.

[DRJDVM's '69]

It can be done but for most people it's not a good idea...

If you have the cash in some form of investment that is making 8%, do you pull that out to pay for the car, or do you take a loan that costs 4% interest?

With interest rates so low, sometimes it can be better to take a loan, rather than use your own $$ that is making more in its current spot than it will cost you for the loan.... And even better if you pay it off quicker than the terms....

But the bottom line is that most people aren't that disciplined to do it the "right way"... So in general the best answer is ... Don't do it...

[skooli]

I did it to finish my car and it's still not finished. It just nickel and dimed me after the loan was exhausted. I have a pile of parts but it'll be a while before I can get to the other portions of the project. For a regular guy like me without sponsors or resources of a big shop, I would just do one piece of the puzzle at a time when you can afford it. I now have a car payment on a car I can't drive.

[tones2SS]

I have done it, a home equility loan. It wasn't a good idea especially with cost over runs, and now the housing market. Now I have a "car payment" for 10 more years, unless I pay it off early, which I am working on.
However, I would not have had the money to save to get it done. I have had an absolute BLAST with this car over the last four years, a few ASCS events, a few autocrosses, and just driving it, sometimes making the car payment woth it.


That's all that matters brother. If you can afford it and enjoy it as much as you can, go for it! :thumbsup:

[67turbostang]

Trust me guys, I have thought about this for awhile. The thought of getting a loan started after I had been looking for a new performance car. I really miss having a fast/fun car. I really liked the Audi S5 and was set on buying one. Then it dawned on me. If I bought this Audi it would only set my project back further. A lot further.. So I thought why not get a loan for my Mustang. Lots of people have loans on new cars, why not get one for my project?? The more I thought about it the more it made sense. I have great credit and qualify for a low interest rate which persuades me even more. I'm thinking about getting a loan for 20-30k

[67turbostang]

Another reason for getting the loan is I want to be able to enjoy my car while I'm still young. I started this project 8 years ago and had a goal was to have the project done while I was still in my 20's. I'm turning 29 this July and realize that I probably not going to reach my goal. :lol: This is something that is not a big deal to me anymore but I still want to be able to enjoy my project before I settle down and have a familly.

[MattO]

Dude, you're only 29. I'm only 3 years behind you. It's OK to take it slow with these things. Don't go and add debt to your name because you're eye balling 30.

[Vegas69]

Life is full of lessons. Borrowing money to fund a depreciating asset, that requires maintenance, insurance, gasoline, and isn't your daily driver is not a wise financial decision. We've all made them but you only get some many mulligans before you end up like 95% Americans at age 65, dependent on someone else to keep the ball rolling. If you need to borrow money to fund toys, you are not in a good financial position at age 29. It's easy to think, I'm young, I have plenty of time. The sand is funneling quicker than you think.

[Spiffav8]

Never trade long term security for short term satisfaction. What you have today can be gone tomorrow.

Don't be this guy>>>>>:G-Dub:

[214Chevy]

Don't be this guy>>>>>:G-Dub:

Or this guy>>>>> :bang:
Or this guy when the creditors come calling>>>> :underchair:

[Al Moreno]

Never trade long term security for short term satisfaction. What you have today can be gone tomorrow.

Don't be this guy>>>>>:G-Dub:

Or this guy>>>>> :bang:
Or this guy when the creditors come calling>>>> :underchair:


Agree, you need to get your head out of the ......:fluffy: and :snapout:

Because Guido is going to be coming for his money and ......:smiley_smack:

than you'll spend your time doing this with your wife ...:catfight: and after a few years this is what you'll look like :lolhit:

[Tony_SS]

This thread wins for most creative use of smilies.

:trophy-1302:

[ErikLS2]

Borrow money for things that go up in value, pay cash for things that go down in value.

[214Chevy]

than you'll spend your time doing this with your wife ...:catfight: and after a few years this is what you'll look like :lolhit:

Then after all of that with the wife, she'll do this to you >> :getout: And you'll be looking like this :confused59: or this :confused18: or this :goofy: after she does this to you :beathorse all because you shouldn't have done this :G-Dub: to buy this :ups: in order to have fun doing this :drive: on the weekends.

[Bucketlist2012]

:welcome3: Now you need to :snapout: ...Do not be a :sieg: ...

You are only 29...And if you think a certain amount will finish the project ? Oh man, it is always more..

These are toys.... They need to be paid for as you go IMO...

I mean if it took you 6 years you would be ONLY 35....That is still young...

So go out and :walkingdog: and think about it:idea: ..

Houses are not ATM's and These Cars are not appreciating assets with all the costs involved..

:animated_bye_bye_em

[BPDRacing]

Look at it this way, if you could afford it you would not need the loan.

Take the money you would be using for payments on the loan and create a car savings account. As you save enough money for certain items buy them and keep going.

It takes discipline, patience and a budget. But in the end it yours free and clear.

:excited:

[sik68]

Turbostang, I am also 29 with a project car I've also owned for over a decade. Some of my gearhead friends growing up decided put their lives on hold to be able to finish their cars...I talk with them now and, yeah their cars are cool and all, but I don't envy their financial positions or general position in life one bit.

Pragmatically, the size of the loan you're talking about is not too bad...basically an average new car loan. So maybe financially it feels "normal" to take out this loan. But the payments will be around far longer than the warm and fuzzy feelings of getting shiny new parts in the mail. Happiness is freedom, and a lifestyle loan like this takes away your financial freedom.

Find another way to "finance" your build... set aside money each month, start a revenue generating side project, take a class or two that will improve your upward mobility/pay in the long run.

[69znc]

There are a lot of smart people telling you no, but your response still seemed to want to justify it.

Some facts: (reinforcing what others have said)
- your financial position is not guaranteed
- the car is pure discretionary spend, health expenses, retirement, college for kids... are not
- is will lose value
- whether you like it or not you are of the instant gratification generation ( see my post to Al on his sons build - many hours and one small step at a time
- at 29 you are invincible! I know, and most of us know, we were all that age and anything was possible

Anything is possible. Just make sure to keep the main thing the main thing and a loan for the car is not that.

One mans opinion

Cheers
Peter

Yes I waited for 30 years to build mine and I could have "afforded" it before but other things come up.

[67turbostang]

:thankyou: for all the replies and input. I really appreciate all your advice and got a lot of good laughs with the smilies use :rofl:

I'm not just a young guy that wants instant gratification. I can see how some of you guys might think that with my previous posts. Also being that you guys don't know me it makes sense. Trust me I probably would have thought the same thing :lol:

I'm actually a very responsible person believe it or not.:angel: I got my first job at the age of 14 and have been working hard ever since. I have always bought my cars in cash(used) or given more then half down(new). The couple of times that I have bough new cars I paid the loans off before half of the term length. I bought my house at the age of 24 and have refinanced(for lower interest rates) my mortgage 2 times since then. I was able to lock in a 30 year fixed mortgage interest rate at 3.25% :D I have always put my responsibilities before fun. That's the reason why I even considered taking out a loan for my project. I'm at a point in my life where I have a really good job and making good money. I guess I just wanted to do something for myself. Give myself a gift for all the hard work I have put in over the years.

I will definitely consider all of the input and advice from you guys before I make a decision. I will also do a little more research. Again, I really do appreciate you guys taking the time to add your two cents. Keep the input coming!!

[Tony_SS]

Do you have car payment now? Are you sitting on any other debt, 2nd mortgage, credit cards, student loans? If not, then I would say go for it. File for an LLC and write it off. Use a credit union and get a good rate. You are young, single no kids, debt free (besides the house) and fiscally responsible, I don't see a problem with it all.

Outline a plan, stick to the budget and just make sure you aren't making payments on a car that doesnt run when the money runs out. And start a build thread!

[69znc]

I will push back and drop it. If everything Tony says is true then go for it. I could agree.

But the need to do it now was my reference to instant gratification. Yes going into debt for something you do not "need" id this the definition of instant gratification. It was not at all a statement of work ethic. They are very different things. You seem to have a great work ethic. You have a good job, again that is now, do you have all the savings done for a change in that income due to health or economic events. Can you make it a year and not worry with all the existing debt and health care costs? I have no idea. If you are married and the wife gets pregnant it changes things...

It is great you paid off two new car loans in half the time but why did you need two new cars already only being 29? You just wanted them or a requirement for work?

Getting credit is easy. Especially if you are young and making a good income. Saving and paying in cash is much harder emotionally when you know in your heart "if everything stays the same" you can easily cover the debt.

I have been fortunate enough to work at the better consulting organizations in the world for 25+ years and we are always the largest recruiters on campus. Fortunate to hire and work with some of the best and the brightest from the best schools for all these years. People who will be successful so I know the thinking and logic. I still stand by my experience and advise them accordingly. I have instilled the same in my two 20 something daughters.

Best of luck with your decision!

[Flash68]

Borrow money for things that go up in value, pay cash for things that go down in value.

Roger that.

[DOOM]

I agree. It's too easy to get a loan and build your car. Wait until you can save enough up or buy parts as you can afford.

SW hit it right on the head!! I put money away for ten years.

[GregWeld]

I always love it when guys say "I can afford it"...... and then they're making payments. If you're making payments -- then NO, YOU CAN'T AFFORD IT.


Go read the INVESTING 102 thread.... follow along... THEN maybe you could afford it before you're 40.... which is plenty young.

[Big-Head]

What he said.^^^^

I've seen it too many times! It will feel good when your project is done and know that you don't owe anyone. Pay cash, alway's! Remember, it's just a hobby!

[Tony_SS]

To his point, people borrow to buy new cars all the time. Nothing drops in value faster. But it's not financial disaster, just paying for a luxury.

If he wants to finance a project, and pay for some fun, instead of having a new car loan, I don't see the difference. Assuming he can stick to the plan and be successful with his build, it will hold or loose less value than any new car purchase.

[bret]

My first real hotrod project said "powered by credit" on the decklid. Thats how I learned not to do that anymore. The happiness is in the achieving, not the having.
Enjoy the journey.

[GregWeld]

My first real hotrod project said "powered by credit" on the decklid. Thats how I learned not to do that anymore. The happiness is in the achieving, not the having.
Enjoy the journey.





Isn't that the truth Bret!

Half the fun is the "hunting and the gathering" part of these builds.

[patriot68]

it took me ten years to get mine done and i would have done it the same way if i could go back.
FIGHT THE McDONALDS MENTALITY. pay cash

[67turbostang]

I always love it when guys say "I can afford it"...... and then they're making payments. If you're making payments -- then NO, YOU CAN'T AFFORD IT.


Go read the INVESTING 102 thread.... follow along... THEN maybe you could afford it before you're 40.... which is plenty young.

I know I can't afford to finish the the car right now. That is why I started this thread to begin with. I know that there is a lot of wise/experienced people on here and wanted some input.

Thanks for posting the INVESTING 102 thread. looks like I have some reading material for the next few days/weeks haha

[67turbostang]

I will push back and drop it. If everything Tony says is true then go for it. I could agree.

But the need to do it now was my reference to instant gratification. Yes going into debt for something you do not "need" id this the definition of instant gratification. It was not at all a statement of work ethic. They are very different things. You seem to have a great work ethic. You have a good job, again that is now, do you have all the savings done for a change in that income due to health or economic events. Can you make it a year and not worry with all the existing debt and health care costs? I have no idea. If you are married and the wife gets pregnant it changes things...

It is great you paid off two new car loans in half the time but why did you need two new cars already only being 29? You just wanted them or a requirement for work?

Getting credit is easy. Especially if you are young and making a good income. Saving and paying in cash is much harder emotionally when you know in your heart "if everything stays the same" you can easily cover the debt.

I have been fortunate enough to work at the better consulting organizations in the world for 25+ years and we are always the largest recruiters on campus. Fortunate to hire and work with some of the best and the brightest from the best schools for all these years. People who will be successful so I know the thinking and logic. I still stand by my experience and advise them accordingly. I have instilled the same in my two 20 something daughters.

Best of luck with your decision!

Thank you. I appreciate you taking the time out of your day to give a stranger some advice.

Now, time to answer some of your questions.

I do have savings some savings put away. I am single, no wife.

I bought my first new car at the age of 18. It was a 5 year loan and I paid it off a little after 2 years. I sold it to buy a used truck and my mustang(project car). I put the rest of the money in savings. I purchased my second new car(06 Honda Civic)at the age of 22. I wanted something reliable with good gas mileage. I paid the loan off in 2 years and sold it soon after. I used the money to buy a used Honda Civic and put the rest toward a student loan.

Thanks again for all your input and advise!