Personal Loan to Buy Speciality Car

[Rev_D21]

This could be a dumb question but is it, or is it not, a good idea to use a personal loan to acquire a fully race prepped car? Besides cash, what other ways could one go about this purchase?

[Encryptshun]

Is this something that you know out of the box you can flip for a profit?

[Rev_D21]

Well I was more hoping to keep it, not flip it unless I ran into some serious problems. But to answer your question I would have to say no, I would not be able to flip it for a profit.

[PEZi]

i'd assume its like any other car purchase... and a race prepped car would not lose as much value as a new car


so..... do it?

[AZhitman]

I'm usually opposed to taking a loan on ANY depreciating asset.

If you can pay it off in a worst-case scenario, I don't see a problem with it. But the lender is gonna want some sort of collateral, which could be problematic (can't insure a race car).... unless you're just taking a cash advance type loan, in which case I'd look long and hard at the overall cost (over time).

[nissangirl74]

You might have a hard time getting a bank to float you a loan for a race car. Especially if it couldn't be sold for a profit. That's their collateral.

[Rev_D21]

I'd offer the bank a 2002 Mazda Millenia and 1996 Hardbody as collateral.

[AZhitman]

Given that a race car is only going to suck up, not generate, income, I'm inclined to say that unless you can pay cash, skip it.

Remember, you can total it on the first lap and there's no recourse. If you;re comfortable with losing that amount of $, then pull the trigger.

[flohtingPoint]

VERY IMPORTANT THINGS TO TAKE INTO CONSIDERATION:

1) Like Greg said, taking out a loan on a depreciating asset is not a wise choice. Taking out a loan for a race car is an even worse choice. Racing is never something you should live beyond your means to do. It isn't a cheap hobby in the least, I easily spent five digits doing it this year and will spend five digits doing it next year.

2) Did you do the research on what the car is prepped for? "Prepped race cars" most of the time are not real prepped race cars, they're just stripped out cars with a crappy ghetto cage and a bunch of mismatch mods that would wind up putting them into a class they're not going to be competitive in in the least (assuming the cage even passes tech). You need to be familiar with the sanctioning body that governs the class the car is built for and you also need to know what cars are the front-runners for the class and if the car can compete.

3) Do you have any form of regional racing license or any track experience at all. Going out and buying a race car without track experience is a horrible idea.

4) "REAL PREPARED RACE CARS" need garages. They will not have windows, keys or in most applications an e-brake. It will be a kill switch click and a push-button start. Park it out front of your house and you're asking for it to get stolen by some douchebag.

5) You WILL need a tow truck. Driving a race car with a blueprinted motor on the street is completely stupid. The motor doesn't last long at all and hours spent going to/from the track will add up quickly.

6) What is your budget like? Seeing as how you're thinking of taking out a loan, you're probably not going to have the money to support the car or get it to enough events to justify the cost of owning the car.

If you're really interested in getting into racing, you can contact me any time and I can help you out with the countless details.

[C-Kwik]

Unsecured personal loans can be pricey. CitiFinancial (may have changed ownership), Beneficial and HSBC all have rates at about 30% last I heard. Unless it can be paid off quick or the price is good enough that even with interest is a good deal, I'd look for another source. I used such a loan for the Maxima I had for three months. I sold it for as much as I paid minus some minor damage that occured when someone hit it in a parking lot and took off. Even cash advances on credit cards might be less depending on the rates for each bank. This is probably a time when having credit against home equity would come in handy.

[Rev_D21]

Thanks for the ideas. Honestly I was thinking about rescuing an older Nissan ITT truck to keep as a nostalgic piece. Maybe some weekend warrior stuff but nothing professional. It would go to more shows than tracks. But if it's a bad idea then it's a bad idea.

[s0m3th1ngAZ]

That might hold it's value very well... do you know who raced it?

[Jesda]

The interest rate will not be favorable. Pay it off in a year and it shouldn't be too bad.

[Rev_D21]

That's what I was thinking.
Initial research points to one of Ken Grammars two trucks. Still in the beginning research stages. I have a lot of things to work out on paper besides funding. I could still just be dreaming at this point.

[Bubba1]

That's what I was thinking.
Initial research points to one of Ken Grammars two trucks. Still in the beginning research stages. I have a lot of things to work out on paper besides funding. I could still just be dreaming at this point.

Do you mean Ken Grammer of Synergy Racing?

[Rev_D21]

Yes, the old Nissan Factory ITT truck #16 driven by Ken Grammar, yes that Ken Grammar. I just spoke with the current owner on the phone and we are having 'talks' about possibly parking it in my garage. Don't want to jinx myself so I am going to shut up now.

[Urabus GodofTraction]

Drive by Dave Ramseying!

Car loans are stupid. Car loans on a race car (truck?), something you risk a very real chance of stuffing into a wall (while uninsured, most likely), are a special breed of stupid.

[PoorManQ45]

Race cars, even those driven by pros, are worthless.

[AZhitman]

Very true in SOME cases.

Lots of three-year old retired Sprint Cup cars being driven at NASA events by people with not-much-more money than me.

Not so true in other cases - try to put a value on Millen's IMSA-winning 300ZX, or Paul Newman's GTP car.

[PoorManQ45]

Very true in SOME cases.

Lots of three-year old retired Sprint Cup cars being driven at NASA events by people with not-much-more money than me.

Not so true in other cases - try to put a value on Millen's IMSA-winning 300ZX, or Paul Newman's GTP car.

That's true, but it seems that only enthusiasts think they're worth alot.

It's like the guy at Stillen trying to sell his Z for >$20k. LOL

I think of it like racing quads. I can buy one of a pros bikes with >$15k in parts invested into it for under $5k. They're neat to own, but not fun to deal with!

[AZhitman]

That's true, but it seems that only enthusiasts think they're worth alot.

Think about what you just wrote.

Who else would BUY a race car?

Sure, it's worth nothing to granny. Just like a hundred original Hummel figurines are nothing more than target practice to me.

[PoorManQ45]

Good point, I answered my own statement

[Azrial]

There is another option. Instead of a personal loan if the purchase is over 10k you can get a specialty loan. Search the net. I ended up using a personal loan to buy a car I planned on keeping. I had good enough credit to not have to use collateral. But It is at a higher interest rate. There are specialty loans for classic cars. You could try that route. Unfortunately that option would not work for me as my purchase price was lower then what they would lend for. I ended up taking a 5k personal loan and we made the paper work look good and I ended up with cash back after taking my personal loan. It's up to you on how you spend your money. I would not suggest doing the same as myself but I did get my car. Everyone has a level of importance for material items. I will never get back out of my car what I put into it. I know this and just don't care. I enjoy it and will keep it and if they will let me they can bury me in it. That's just how I feel about my vehicles. To others that may be insane. Most wealthy individuals only ever buy used cars and pay cash. I never really cared because I figured if I die tomorrow it's not going with me so I might as well have fun while I am still around.

[Rev_D21]

Drive by Dave Ramseying!

Car loans are stupid. Car loans on a race car (truck?), something you risk a very real chance of stuffing into a wall (while uninsured, most likely), are a special breed of stupid.

Not reading the thread entirely then commenting calling me stupid is a special breed of stupid on your part. Did you read the thread...stupid? Did I say I was going to race professionally...stupid? I said I might cone race for fun but main idea is to own a piece of history and show it. Read first, then make the special breed of stupid comments like you usually do.


ps: TROLL!

[Bubba1]

Yes, the old Nissan Factory ITT truck #16 driven by Ken Grammar, yes that Ken Grammar. I just spoke with the current owner on the phone and we are having 'talks' about possibly parking it in my garage. Don't want to jinx myself so I am going to shut up now.

Cool. I met him once a few years ago at VIR. Synergy was testing some Porsche Rolex cars at VIR during an Audi Club event (during lunch break). He was hanging out in the pits and was nice. I'm sure I have pics of the porsche's somewhere, he might be in one of the shots. I'll have to dig for them.

[Rev_D21]

He has a really nice indoor race kart facility, looking at the pics on facebook it's top notch stuff. He's also a nice guy, replied to my email about the truck same night with lots of good info.

[Amays U G37S]

If it is something you want, then go for it. Get a good price on it, and take out a loan, if you don't mind paying for it. Who cares. Credit is everything in this world, makes you who you are, if you got it good, and you can pay on it, then go for it.

Pics???

[Urabus GodofTraction]

Drive by Dave Ramseying!

Car loans are stupid. Car loans on a race car (truck?), something you risk a very real chance of stuffing into a wall (while uninsured, most likely), are a special breed of stupid.

Not reading the thread entirely then commenting calling me stupid is a special breed of stupid on your part. Did you read the thread...stupid? Did I say I was going to race professionally...stupid? I said I might cone race for fun but main idea is to own a piece of history and show it. Read first, then make the special breed of stupid comments like you usually do.


ps: TROLL!

Hey...stupid (fun!), you're still getting a personal loan on a race car! While it's a piece of history to you, it's not exactly an appreciating asset. Stupid, stupid, stupid idea...stupid!

[flohtingPoint]

I said I might cone race for fun but main idea is to own a piece of history and show it. Read first, then make the special breed of stupid comments like you usually do.

Regardless of everything, like I said before, you will need a hauler. It's not something you can drive on a public road and expect the motor to last long. Race motors have a ~20 hr lifespan.

An IT car/truck isn't going to appreciate in value. You may be able to trick someone into paying more than you paid for it, but if anything, it's going to take a nosedive each year. Even if you wanted to, given the fact you cant even really race this truck anywhere outside of Atlanta I believe (in a series), it's kinda worthless to begin with. IT isn't even a national series, they're all regional. Basically you'd be going into debt to buy furniture.

You're also getting hosed on the price if the asking is 5k. I bought a functional proper IT car that won it's region within the last couple years for 4k, it came with the farm (3 spare sets of wheels/track tires, spare motor components, spare brake pads, spare fluids, spare fenders, etc) AND I can actually use it in a series in my region (unlike an ITT).

[Bubba1]

[Hey...stupid (fun!), you're still getting a personal loan on a race car! While it's a piece of history to you, it's not exactly an appreciating asset. Stupid, stupid, stupid idea...stupid!

It's only seems stupid from your perspective, Charlieo er Urabus. Not everyone has cash lying around to devote to the "hobby "(whether he takes it to shows or has fun with it at a race track is irrelevent) Yes, it's true that buying a race car is not generally an appreciating asset and one should probably try to avoid buying one completely by credit, but that should not dissuade him from investing in something he wants. IMHO, getting an old race car in good shape especially one with a history tied to someone well known in the field is very cool. You're also off base about insurance. track car policies are common.