Take out a loan to buy a charger or no?

[marshallfry01]

I'm not sure where to post this so mods move it if you need too. Is it common for people to take out a loan in order to purchase a Charger? I'm talking about a 68-70 driver. I hate to say it, but I feel that's my only option at this point. I'm 25 years old, no student loans, no truck payments, and my house payment is only $465 a month for 5 more years. (I built a shop house on 2.5 acres) I have a great job. I fly a King Air F90 for a corporation out of Hot Springs, AR. I have a decent amount saved up but it seems like prices keep climbing. A car that was $20,000 5 years ago is now $30,000+ now. IF I could find a charger in decent shape for around 30,000 would I be crazy to finance it? I couldn't care less if it's numbers matching blah blah blah. A 69 318 car would be perfect as long as it's turn key. I'd really like a General Lee but that might be hard to find. What are your thoughts?

[VegasCharger]

You're not going to like my answer but, HELL NO!!!

But I'm coming from a very small percentile group as most Americans will borrow money for just about anything.

Car payments suck! Debt sucks!

With the exception of a house, if you can't pay for it you can't afford it.

I await for the majority to tell you the opposite. You know be in debt the American way. Not for me.

Good luck on landing your dream car whatever you decide to do.

[Lennard]

I agree with Bryan, no loan for anything other than a house.

[GreenMachine]

I say if you can get it under 5%, preferably 2-3%, then it's not such a bad idea. Especially if the prices keep climbing, that is the big question. A (2 dr htp)Coronet is basically a Charger with sheetmetal shaped slightly different, and rallye dash as an option vs std.. And it seems like you can get those at driver quality for half or even 3 times less. In the drivers seat you can barely tell the difference. Which leads me to think maybe the Charger is overpriced??? Or maybe the Coronet is underpriced???

Most of the population gets a car loan for a disposable car!! Say $30K for something that's virtually worthless in 15 years. A 68-70 Charger is more of an investment at this point even if you use it as a daily driver. And IMO will never be virtually worthless, even if technology moves away from internal combustion engines.

So I say do it if a Charger is what you really want and are going to enjoy it vs keeping it stored away. I think it's smarter to take out a loan for a classic car than it is for a modern disposable car.

As a final argument, even if you had $30K in an investment account that you could liquidate to buy a Charger, it would be more profitable to take out a loan assuming a lower interest rate (refi/home equity) than what the stock market has been doing lately. But, the historical average of @ 10% is not guaranteed.

[Mytur Binsdirti]

You're not only going to have a car payment, but you'll also be spending plenty more to fix it up.

[JR]

If you can get a decent rate, I'm not opposed. A clean example will certainly hold enough value to get you out from under the loan when it's time to sell. Maybe save 10 percent cash and borrow the rest. You'll likely never be underwater on the note that way

I get interest sucks and everything, but if you're going down this road, you've already committed to blowing thousands of dollars on a pointless toy car anyways, so I say go for it.

[XH29N0G]

Don't do that.

There is no guarantee the cost will continue to outpace your means, but it is guaranteed that borrowing will lock in the cost plus interest on top of everything you will want to spend to fix it up.

:Twocents:A lot of us wish we had put more into retirement when we were your age. The contribution limits simply do not work to give you the equivalent of a pension unless the investments sit for a very long time.   It is better to max out retirement contributions at this time, then save the excess for the car.
 

[70 sublime]

I would not advise you to borrow money for your Charger if it is your first Charger
You will get screwed on what you buy
The joy of buying it will over shadow what you are really looking at
Save up $10 000 and go buy what ever piece of junk Charger you can find
Take it home and learn from it as it will be a rusty pile
You will learn what to look for later
Hopefully it will be worth something after you work on it
You will then be able to sell it for a little more than you paid because you are doing everything your self
Then trade up to something better after you have some experience what not to buy 

[jefferson]

No! Agree, im a tad older than you and own a 68 RT and i along with my parents had the same motto! apart from a loan for a house, if you cant afford it, you go without!
If it meant getting 2-3 jobs to save extra cash, or taking on more shifts to put a little extra away every week, that is what we did, and before everyone says well its not easy getting 2-3 jobs or taking on extra shifts,
we have plenty of young workers whom turn down almost every shift they are asked to work, or are asked to work at another job site and turn it down etc.
Also, i dont see the charger market going up too much from where we are now, i think we are starting to level out/ prices possibly may remain around the same for the next few years?
i could be wrong, but seeing the last auction results, i still think a 40-50k car will still be 40-50k next year and the year after.
Dont see it going up double like it did from around 2010 to about last year IMO.

[Mike DC]

                    
A $20k car five or six years ago can be pushing $30k today just from inflation.  Official US govt data has been understating the rate of inflation for many years.  


Whatever you do, you will be spending more on the car after you get it.  Thousands.  I don't care what condition it's in. 

[Homerr]

So, you're saying that you can't afford a Charger then.

[c00nhunterjoe]

30k will buy you a 68-69 charger that needs 50k worth of work. Do not finance it unless you want to have 2 loans. One to buy, and one to fix it.

[Mytur Binsdirti]

30k will buy you a 68-69 charger that needs 50k worth of work. Do not finance it unless you want to have 2 loans. One to buy, and one to fix it.

[INTMD8]

I take out loans for some cars and have no problems with it for the same reason.

I've bought more than a few cars that the value far outpaced 3% interest. Payed off early and saved a ton of money in the process.  

All the old guys will say you can't afford it but most of them have had mortgages which interest is FAR worse.  Not to mention many of them bought their Charger 3 decades ago.

Should have been living in a tent since you couldn't -afford- that house.  

That being said, if you're going to do it buy something nice. If you aren't qualified to make a determination as to whether or not a car is in fact nice and worth the money, pay someone that is to inspect it for you.

[lloyd3]

Well, way back in 1995 I was in a similar position. I was watching the prices of these things climb out of any hope of my acquiring a decent one w/o getting a loan. My wife and I had at least 2 regular cars, 2 real jobs, no children, and only a home mortgage to service.  We had just sold a 2-seat sports car that she/we essentially never drove and it was my turn.  I, sadly, can't even remember all of the details now but we did get a loan for something like $10K and I bought my car (for $11,700 if I remember correctly, some numbers you don't forget).  It was a nicer number 3 condition car and a real R/T 4-speed, but...not a numbers-matching car and it was all the way across the country, which was clearly a gamble. Lots of things could have gone wrong (for which I sweated endless blood over), but we did it.  It was something that was very important to me then and she was a good sport about it.  I believe we paid that loan off very aggressively and cleared it in less than 2-years.  Now my 16-year old son is the one that is crazy about it (go figure?).

Only you can do the math on something like this. I had been chasing collector cars (mostly 60s muscle) here in Denver for some older friends back east, and also buying and then fixing/selling lots of plain-Jane cars as a sideline so, accordingly, I had a few skills and resources. I had also owned several daily-driver muscle Mopars before this one and knew what I was getting into. This meant that I also knew what to look-out for.  

[JR]

I get the "borrowing money for a non necessity is a bad thing", but there are a couple more points to make for it.

Assuming you buy a turn key car that doesn't need much sorting after purchase:

1. Why tie up XXX of your capital in a toy? Especially if the toy will likely hold its value? I prefer to keep my cash liquid and borrow the banks money. You can always sell the car at any time to get back out from under the loan. Or considering the car will likely appreciate, you'd be ahead of it.

2. Who says you have to borrow money to buy a car then borrow money to fix one? Screw that, borrow money on a nice example.

3. You're either going to pay up later due to inflation and the decreasing supply of Chargers, or you're going to pay up now in interest. Either way, you're spending the money. Atleast now you have a better selection of vehicles than you likely would in a decade.

4. Again, I get that borrowing money for a toy isn't a smart finicial move. But you know what, owning the car in the first place is a stupid financial move. The only financially sound advice here is to forget the dream of owning a charger, buy a used Prius and drive it til it dies. THATS the only truly smart money move you can do with a car.

[kent]

Well fellas. I'm going against the grain here. If I had to pay cash or use my own money to pay for my Charger I wouldn't have one. I'm just a working guy and my mattress is not that thick yet. Everything I ever owned was paid for by my blood a sweat. No hand outs. Yeah somethings was pay as you go but all my major purchases was always a trip to the bank or sign a purchase agreement at a dealership. After that it was off to work I go.
I'm not going to get in a debate over this but I bought mine when I was 35 now 52. It's well paid for along with the house and the kids are all gone and I'm just starting to enjoy life. So if I had to do it again I would. The only problem is you can't buy a Charger now for what we paid 20 years ago.
Got to break a few eggs to make a omelette.  Than go back to the store and buy more. lol  It's a vicious circle for the working man. All I can say is start young.
Sorry to ruffle some feathers but that's my perspective on major purchases. Yes it's a toy but a man has to have a few toys. 10-4.

[chargervert]

Start saving for your Charger now, if you think you can afford to pay a $500.00 a month payment, then put that money in a savings account, and don't touch it. After you have 20 grand saved,you can start seroiusly looking for a Charger.  Keep saving while you look, as you will probably need 30k to get something decent.  Keep in mind that having cash money on hand to negotiate a deal is a big plus. If you do find the right car,and you have half the money already saved,you will not have to borrow as much money to buy the car. Nothing can take the fun out of having a classic car,like when it becomes a burden, due to having to make payments.  If you have a spouse, it will become an object of hatred to them,when they cannot do or buy other things because you owe money on an old car!

[Aero426]

I'm not sure where to post this so mods move it if you need too. Is it common for people to take out a loan in order to purchase a Charger? I'm talking about a 68-70 driver. I hate to say it, but I feel that's my only option at this point. I'm 25 years old, no student loans, no truck payments, and my house payment is only $465 a month for 5 more years. (I built a shop house on 2.5 acres) I have a great job. I fly a King Air F90 for a corporation out of Hot Springs, AR. I have a decent amount saved up but it seems like prices keep climbing. A car that was $20,000 5 years ago is now $30,000+ now. IF I could find a charger in decent shape for around 30,000 would I be crazy to finance it? I couldn't care less if it's numbers matching blah blah blah. A 69 318 car would be perfect as long as it's turn key. I'd really like a General Lee but that might be hard to find. What are your thoughts?

CONGRATULATIONS on making some very good financial choices and paying off your existing debt.     

It sounds like you "could" take out the loan.    But if I were in your shoes, I would continue to save cash and pay off the home.        With the aging of the muscle car hobby, time is on your side.     These cars cannot go up forever and eventually,  there has to be some softening.      There are a lot of cars coming to market with a lot more to come in the next ten years.    As "evergreen" as Chargers seem to be,   I feel that if you are patient,  the market will come to you.     

[comet_666]

I took out a cash advance on my cc in 1994 and bought my car for $2000, running and driving.
Over 25 years I have close to $50 into it.

[krops cars]

Life is short. I agree payments suck. Sounds like you are financially smart. If you can get it now get it. If you wait till you are older. You maybe dead. It's an investment if you take care of it you will get your money back. Not like an every day car. It took me along time to get mine done. Will be done by March. Good luck with your decision.

[marshallfry01]

Thanks for all of the replies guys. There's a lot of good advice from both sides of the fence. I agree with all of y'all. I see the good and bad no matter which decision I make. I'm not sure if I was clear on my original post but I don't plan on using a charger for a daily driver. I have a paid off truck for that and it's dependable. And I won't spend 30k on a piece of junk Charger with a bunch of hidden secrets. I know my way around cars minus body work. I know all the trouble areas on a Charger, and what to look for when body work was cobbled together. I'm redoing a 1972 Chevelle that will soon be up for sale. When I'm done with it, I thought about using the money I get from selling it to put towards the down payment. I'm hoping around the 15k mark. I've owned 2 1970 chargers in the past but they were project cars. They were too much of a project for me though. I kept them for 3 years before I decided to let them go. I sold them and made enough to finish up my degree debt free so I don't regret it. I promised myself the next Charger I get will be very close to being rust free and a turn key driver. I know they'll all need some work but I don't want a huge project.

The reason I thought a loan might be a good idea is because these cars hold their value. In 3-5 years when the loan is paid off, the car will be worth the same or more. It makes more sense to me to take out a loan on a turn key 68-70 than it does to finance 40k on a 2020 Dodge Charger. When you drive them off the lot you've already lost money... same with any new car.

[Finoke]

A savvy buyer is fine taking out a loan. Just don't over pay for junk.

The fact that you have owned in the past puts you in a good position to buy with a loan. That way if for any reason you need to get out of the loan, the car will sell fast and hopefully for equal money or a slight profit.

I've owned a dozen or more mopars in the last 20 years and have always borrowed to complete a purchase. I wouldn't borrow against my house or my retirement. But short term loans no problem.

[70 sublime]

I did not know you had any Charger history to know what to look for or stay away from
If you are careful with what you buy a loan could work out ok for you to get it done

Just be careful how many women come along in your life in the future as the car may not be your top priority any more   

[Aero426]

The reason I thought a loan might be a good idea is because these cars hold their value. In 3-5 years when the loan is paid off, the car will be worth the same or more.

People said this in 2006.     There was no end in sight.   And then there was a big thud in 2008.     It took a long time to recover.    And everything goes in a cycle.

Is your strategy unreasonable?   No.     But we do not have a crystal ball.      

Rule: only play with money you can afford to lose.      Finish paying off your home.   Fly that plane, save some dough for the Charger and go for it.  

Look at the average age of people at muscle car shows.    Do you see a line of young people waiting to take their place?     Again, with the power of youth,  time is on your side.