A couple first gen Camaros in my price range (around 15K) have surfaced locally this week. I'd like to pull out the $15K in cash when viewing these cars...but I'm just not a finance-oriented person, so....

-- I can come up with around 5K in cash by juggling other assets, but how to finance the other 10K?

-- home equity loan?

-- credit card check? (my credit card company sends me these blank checks every month for years,
but I just rip them up, afraid of hidden interest)

-- personal loan?

-- beg a relative?

-- sell my first-born son?

-- other? (not illegal)



I have enough income to pay off a 10K sum in a year or two, barring unforseen $$ problems...I just need the cash in hand NOW. What's the best and worst way to do this in terms of interest etc? I have a mortgage but no other substantial debts.

Well...

Do not put it on a credit card, but i am the type who likes to pay off card usage as I go and not carry a balance.

Signature loan is a route, unsecured so your car is not tied to it.

Equity loans, you get tax deduction on interest paid so that is a major perk imo, and rates are way low these days. However there is the current issue of declining house values and some mortgage co's being less inclined to lend at the moment.

If me, and I had to go the route of finance and felt safe in picking up the xtra debt for 2 yrs then home equity would be the route I went.

Humm....

Financing a new car is one thing but not a old car. Save up then buy a car in the amount you have saved. These old cars are full of surprises and it doesn't take much to put one out of commission in that price range. Paying on a car that doesn't run/drive or pass inspection isn't a wise move ..in my opinion. Save first :)


Kev

I've always been told to not finance your toys.
If you need to finance, well your asking for financial trouble down the road, IMO.

If you do, well I'll echo what Kevin-Sixtyate said.

points well taken...here's a little more perspective, I'm turning 49 years old, I've been in the work force for 33 years. Saving that much would be a long-term proposition since I have a daughter in college (which I'm financing) and when she's done it's my son's turn. He won't be out of college until I'm 2 years from retirement. So time is of the essence in a sense (I've been camaroless for 2 years).
I could save until age 59 but I want to enjoy the hobby for the next 10 years!!!

points well taken...here's a little more perspective, I'm turning 49 years old, I've been in the work force for 33 years. Saving that much would be a long-term proposition since I have a daughter in college (which I'm financing) and when she's done it's my son's turn. He won't be out of college until I'm 2 years from retirement. So time is of the essence in a sense (I've been camaroless for 2 years).
I could save until age 59 but I want to enjoy the hobby for the next 10 years!!!

Consider where the Classic market is going. Is there appreciation left in these cars? Will prices be stagnant the next few years? Where would you be if the 15k car suddenly was worth 8k?

What kind of equity do you have in your home ?

I think you answered our own question, you said you could pay off a $10k loan in 2 years, so if you start now, you could pay cash for a car in Aug. 2010, and the money you save in interest will pay the gas to drive it for a while.

Financing toys is just a bad idea.

Buy whatever project $5K can get you and tinker as money allows. Or look at another car that doesn't draw as much money as a first-gen.

In my opinion, financing an old car is no different than financing a new one. You still have the same issues:
1. if I have to sell and its devalued, what am I going to do?
2. can I earn more on my cash in investments than I pay in interest?
3. how much payment can I really afford?
4. where can I get a good loan?

In this case, my bet is the car will devalue far less, even in the muscle car market goes stagnant, than a new one would. As for interest rates, the market sucks right now, so maybe you couldn't earn more in investments than you are paying on the loan, its probably a close call. I don't know what you can afford. I know I can get a loan for the same rate whether its new/used/classic from my credit union, so there's no difference in buying a new one.

The only real risk I see is is if the car won't run and you can't afford to fix it. Now you have a big expensive paperweight.

If you finance it as a auto loan you will need an appraisal. And you will have to speak directly to a loan officer.

All good points. I'm not sure how much of my financial situation I want to publish here for the world to see, but I will say that my house is ALMOST paid off, few more years. I've owned over 35 cars in my life, and paid cash for all of them (or bartered or whatever), never took out a loan. I've always been in the mindset of "don't buy unless you have the cash." Difference now is that Father Time is catching up w/me...

Actually the idea of saving for a couple years & then paying cash is appealing...I've just never been able to do it. Always go from one $$ crisis to another.

Not trying to pile on, but I was going to say exactly what Chops said.

You contradicted yourself and that's not a good sign. Financial issues always come up...especially with one kid in college and another right behind. If something comes up and you have a loan for a toy, then things get tough. While a home equity line is the smartest way to borrow (if you have a bunch of equity in your house...like 40 or 50%), it's too tempting or becomes a necessity to just pay the interest portion. Then the toy never gets paid off until you sell your house.

I don't think for 15k you'd be getting a car with a ton of collectibility value built into it. You may not lose big when you sell it, but it won't go up over time as much as a #s matching Z either.

I say make the car payment to a savings account for another year, then see what's out there. I don't think the economy is getting better very fast, so you can probably find a better deal next summer.

"Actually the idea of saving for a couple years & then paying cash is appealing...I've just never been able to do it. Always go from one $$ crisis to another."

That tells alot, no offense. Based on that will you have the discipline to repay the equity loan as you planned? Crisis will always happen, Iseem to have had one or another ever since I got married.

There is nothing wrong with utilizing the equity in your home at your age, however just remember that money still has to be repaid and that means a new payment every month. Soon as you start slipping to handle other issues then you lapse into just covering interest, etc... and now have a debt anchor on your back.

In the end only you can decide what is right for you.

I just recently re-fied for a construction project and that fell thru.. the temptation to buy a running 69 Camaro is very high for me. I can feel your pain. I borrowed what I could afford to pay back not what was available in equity. If all the rest of my ducks were in a row I'd set a budget and borrow the money for the car if I was wearing your shoes. I'd have to feel reasonably certain that job, health and marraige were all stabil and had the support of the spouse before I did it.

Jeff

I bought my 69 camaro 4 years ago and financed $12,000 and the credit union loaned me every penny. We were going over the different models of the 69 camaros and it didn't matter what model it was, they would have loaned me up to $70,000 on a 1st gen camaro! I was shocked. These cars are still holding their value...banks are a different story but if I was you I'd ck out a credit union for a loan...

I got pre approved through NavyFederal credit union for mine. I went in asked them for a used car loan and walked out with a blank check ($18K). Once I had the check I then went to the dealer of course haggled with him and asked him how much he would take if I had cash (since I had the NavyFed check) once I liked the amount and put the amount in, signed it, I then drove mine home. NavyFed never asked any questions or to see it, al they needed was the information for their paperwork which I believe they got from the dealer, now the car is now all mine, no more payments as of yesterday!!!!!!

Jeff: job is stable. marriage is on the rocks. I've had health warnings too, that's why I'm considering living NOW instead of saving for tomorrow.

I do have another asset: the car my daughter drives. If she takes out a loan and buys it for me, I'd have enough cash without taking out a loan....she's squawking about this though....

Hey all....I had the same delema about financing an old car / project car. Instead, I bought a slightly used car (in my case a 2000 corvette because they held their value better), financed it at 4.5%, and drove it for 4 fun years but kept the miles low.
I just sold it after it was paid off, took the cash and bought a 68 Camaro.
Like others mentioned above, it's a lot easier to finance a newer car.

Jeff: job is stable. marriage is on the rocks. I've had health warnings too, that's why I'm considering living NOW instead of saving for tomorrow.

I do have another asset: the car my daughter drives. If she takes out a loan and buys it for me, I'd have enough cash without taking out a loan....she's squawking about this though....
I have to rethink this one now. I am divorced and I know everyone doesn't go through what I did ,but some got it worse. My Ex tried to "sell" me my mechanics tools from my years as a pro mechanic in lieu of the equity in the house. I had to play hard ball with the lawyers in order to get the tools and half the equity. If this new car would be a serious friction point in a divorce I'd hold off until after the papers were signed. If the divorce is in process it will go by quicker than it seems, and soon you'll be living the happy life again wondering where all those years went. Good luck in whatever route you take.

Jeff

Jeff, right I hear you....this car deal would be done above board, with my significant other's approval and terms in writing, notarized. I'm not going to screw around on that front...

I'm sure this all sounds like a soap opera...but my original question is still, what's the best (and worst) ways to get some cash in hand??

Hate to hear the above, and only you know how far the situation will degrade marriage wise. But if you think it will get to a divorce stage then play it smart...

Stash away the money you planned to repay any financing you obtained. You will want to hide/hoard all you can if you do get divorced. Then when that is settled re-evaluate your situation. This is all if things get bad enuff to call the marriage quits.

Now if it was me and I did not have my 68 and I was looking for a toy...
I would do 1 of 2 things:

1. Buy New Dodge Challenger
2. Wait for New Camaro
3. Pick up a New Mustang (If I just could not wait for a camaro, and did not liek the challenger, etc... this is the fall back plan/last resort)

You can have a new car, which is easier to finance, daily drive it, tweak on it, and simply enjoy the car. Muscle does not have to be old anymore!

"I'm sure this all sounds like a soap opera...but my original question is still, what's the best (and worst) ways to get some cash in hand??"

Donate blood? j/k

Your best route is a home equity based solution, tax breaks, no lien on the car, etc...
Worst route anything that goes on the credit card

If me the equity line would the route, but that would require my wifes apporval etc... since it is tied to my house.

I will go against the people saying the home equity line is the best route to go. If your marriage is not stable and is heading towards divorce, the last thing you want to do is add on to the financing of a house. If a divorce comes into play, the debt on the house will dilute the sale, etc. and you would come out even worse in today's real estate market. If you end up having to "buy out" your spouse's portion of the equity, you could be looking at refinancing the entire house (if you decide to go that route), and if you end up at more than 80% financed you will pay mortgage insurance and the interest rate will be higher. If you are unsure of the future of the marriage, stay away from a HELOC, etc.

As other's have said, if you can afford a monthly car payment, put that money into an interest bearing account and leave it there. Open a separate account, or get a safe deposit box and every month go put the amount you would have paid in a car payment into it.

In terms of living now due to health, I can fully understand that, but you also do not want to leave your kids in a situation where they will not be able to finish their education, etc. if you are not able to be around to help pay for it. If you have a good life insurance policy that will take care of that, then certainly live now. If you don't, think about the impact you not being around would have on your kids.

Just some things to think about.

I agree on the Home Equity not being the way to go. Check with the local banks and see if they'd give you a loan with the car as collateral. You could wind up having to sell the car early if you use home equity...or if you do get divorced at some point, then you'll have less cash coming to you after the sale and you may need that cash at that time.

You should talk to a divorce attorney if you do this. Not that you're planning on a divorce, but if you're already on the rocks, you should know the financial implications of buying a car that will surely be used against you in court...signed permission papers or not.

I think you can get a loan through Capital One Auto which is basically a blank check. The age of the vehicle might matter so check it out. You'll pay more interest than a normal car loan though. I've also taken out some 401K loans which everyone says is a bad idea but with the market returning -10% on the 401K, my current loan is looking real good. I think I'm paying myself back 3 or 4%.

I would wait until your mariage/divorce is settled, wait until the dust clears and then if you have the cash, or a low interest short term loan, only then if you still wanted it, pick up a classic car...I have been through this divorce stuff and it is not cheap, don't bury yourself with more debt...Big mistake...

I'm taking notes on all this...will for sure run it by legal counsel before doing the loan thing...

His last question boiled down to one thing:

"I'm sure this all sounds like a soap opera...but my original question is still, what's the best (and worst) ways to get some cash in hand??"

I do not know any more about his situation than anyone else, but he wanted to know the best way to get some $$$$. All the issues aside a home equity is still better than a signature loan, credit card, etc for a 10k amount in my opinion.

Yes housing values are on the decline, and he has marriage issues per his statement. But based on his stating the house is almost paid for a 10k line will not put his value upside down. And if they do split and the wife got the house he could still carry the equity line in the settlement, and if forced to sell a 10k equity on a house almost paid off would still be easily covered in a property sale.

He has heard everyone say to wait until after things settle down, but if someone has made their mind to do something and are asking the best way to proceed... well thats their call in the end.

Divorce can bring out the worst in people. I know of two current ads of '68 Camaros being sold due to divorce. The Camaro was the "husband's joy" and, in case, he was selling because the divorce was 50/50 and he could not afford to buy her 50% of the car. In the other case, the Camaro went to the wife and she's selling it. If I were you, I'd wait until the divorce issue is settled.

Home equity loan without a doubt.

I appreciate the feedback. Camaroinaz, you're right I'm definitely not going to jeapordize my kids' college & futures for a car hobby.

There's really two issues: first, should I take the plunge & over extend to drive another Camaro? second, if I decide to do that, what's the best financing route? They really are interrelated because if I could get a good finance option I'm more likely to do it rather than a high-interest deal.

Stay tuned...

I appreciate the feedback. Camaroinaz, you're right I'm definitely not going to jeapordize my kids' college & futures for a car hobby.

There's really two issues: first, should I take the plunge & over extend to drive another Camaro? second, if I decide to do that, what's the best financing route? They really are interrelated because if I could get a good finance option I'm more likely to do it rather than a high-interest deal.

Stay tuned...

First issue: No
Second issue: N/A

My vote is save the $ and pay cash. I'm not into extra monthly payments and the interest that goes out on those loans.
JMHO
Doug