Who has done a financial no-no in order to buy a classic?

[bull]

I mean cashing out a 401k, a cash-out refinance or maybe selling an heirloom to buy a Charger, Challenger, Cuda, etc.? I'm mostly interested in those who cashed out their 401k and how much they paid in penalties. Was it worth it?

[Blown70]

I mean cashing out a 401k, a cash-out refinancing, selling an heirloom, to buy a Charger, Challenger, Cuda, etc.? I'm mostly interested in those who cashed out their 401k and how much they paid in penalties. Was it worth it?

You mean when I am going to take all the cash I have in the bank to buy the two challengers?   Well its not doing me any good in the bank.

401K, shit I am self employed.  I have have what I have.

Tom

[Old Moparz]

I took some money from a joint savings account to buy the '70 Road Runner last summer, but it was discussed with my wife before I did it. She's fine with it, & knows that all the old cars are investments themselves. I wouldn't do it if it was going to deplete the savings, that would be stupid. As for cashing in a 401, I wouldn't do that either. Even if the value of the car exceeded the interest & value in the 401. I don't think I'd want to take the chance that the car market falls out, or something happens financially & I have to sell the car quickly & lose money. I think the penalties are somewhere around 30% too.

[Johnny SixPack]

We took out a 5-year loan from our finacial planning institution (Edward Jones) to pay for the "70 and "69.

Yeah, it hurts to lose $1000.00 a month to them, but it's money well spent I believe.

As I look at it, I easily get that much enjoyment out of them each month, and as a plus, I'm too broke to afford to do anything but put gas in 'em for the most part.

Sure cut down on the drinking.

And in 5 years once they are paid off (well, at least the initial cost of purchasing them), I believe they will easily be worth 15% more than I originally paid for them.

Not that that is a real driving factor, as I don't see myself as being able to part with either of 'em.

[Silver R/T]

I paid cash for mine

[694spdRT]

Fortunately, my classics are all paid for and I never needed to borrow any money on them because I have had them so long. I do have one loan on the '05 Cummins but, I at least I owe much less than it is worth.

I don't think that a classic car really would be a bad investment. The problem is that I would have to buy something I don't like or want. I could see having problems parting with anything nice as I have turned down several offers to buy the '69 in the first month I had it done.  

I had a chance to look at a 10,000 mile Plum Crazy '70 Challenger Hemi 4 speed on Friday and the guy was asking $350,000 for it. To be honest he really is not out of line looking at the current market. The problem with that investment is I don't have the $350K to buy it in the first place.  

[derailed]

I borrowed 10000 from my home equity but was able to pay it all off the following year with my tax return

[bull]

I borrowed 10000 from my home equity but was able to pay it all off the following year with my tax return

Dang. That's a big azz tax return.

[hemihead]

I think some people that are borrowing against their Houses , future, etc, may be very sorry someday as most cars are not really good investment property.

[PocketThunder]

I borrowed 10000 from my home equity but was able to pay it all off the following year with my tax return

Dang. That's a big azz tax return.

No kididing, he's paying in way too much if his return is that large in one year.

[triple_green]

You mean like borrowing $40K from a Home Equity Line of credit and then having the shipping company let the car roll off the back of the carrier and having the rear end smashed in? And then having the carrier/insurance co. still not pay for the damage yet after 2 1/2 months?

Nothing here 

3X

[bull]

You mean like borrowing $40K from a Home Equity Line of credit and then having the shipping company let the car roll off the back of the carrier and having the rear end smashed in? And then having the carrier/insurance co. still not pay for the damage yet after 2 1/2 months?

Nothing here 

3X

Yea, something like that. No resolution yet? Might be time to call in the big guns.

[derailed]

I borrowed 10000 from my home equity but was able to pay it all off the following year with my tax return

Dang. That's a big azz tax return.

No kididing, he's paying in way too much if his return is that large in one year.

Id rather have them take out a little more each week and get a big return than have a surpise at the end of the year.

[andy74]

i usually end up getting about 5 grand at tax time also,although i set my tax deductions high to cover the fact that my chrysler bonus cash is untaxed.a friend who worked with me didnt adjust his with holdings and had almost 20 grand in chrysler bonus money(2 years ago)and with no kids,wife etc,he had to pay almost 5 grand in taxes!

so,i use the chrysler money when i can for charger stuff,and half my return goes in the charger/project car fund,and the rest gets used for normal day to day bills etc.i also contribute 10%to my 401k,7 from me and 3 from my employer,which i am allowed to borrow against if need be-i did when i initally bought the charger,and then paid my self back with intrest because it was cheaper than a credit card that i used at the time.

i would do it again if i had to,because i cant drive my 401k,and smoke the tires !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Orange_Crush]

If you think about it, the act of buying one of these cars is a financial no-no...unless the car you buy is already restored, chances are pretty good you're gonna spend more on the resto than the car is actually worth.

Having said that, if you are gona borrow the money to buy one of these things, I would say that a home equity loan or line of credit would be the way to go...at least if you do that there is a tax break on the interest you pay.

I actually do something that everyone advises against with my taxes.  I have more money withheld every month which I wind up getting back at the end of the year.  I know that what I'm basically doing is providing the government with an interest-free loan, but it saves me from actually having to write a check to uncle sam every year AND I usually get 2 or 3 grand back which is basically "mad money."

[NHCharger]

Bull ,haven't you heard the expression "creative financing". Several years ago a moparts member bought a mid 60's C-barge. He financed the deal. He later had money problems and posted about his money woes and possibly losing the car. moparts members sent him money to help him out. Less than a year later he bought a second car, 73 Charger U code I believe. After showing off his new Charger next to his other car he couldn't understand why some members were upset that he made no effort to repay the people who helped him out instead of buying another car.

[Orange_Crush]

Bull ,haven't you heard the expression "creative financing". Several years ago a moparts member bought a mid 60's C-barge. He financed the deal. He later had money problems and posted about his money woes and possibly losing the car. moparts members sent him money to help him out. Less than a year later he bought a second car, 73 Charger U code I believe. After showing off his new Charger next to his other car he couldn't understand why some members were upset that he made no effort to repay the people who helped him out instead of buying another car.

Do Tell...who was that?

[Mike DC]

Actually, I think people have a distorted view of what's going up and what isn't.  The expensive cars selling for hundreds of thousands of dollars are the ones that are artificially inflated.  It's the regular street cars that are have been going up slowly & steadily for a couple of decades.  (And even now at the height of Barrett-Jackson fever, you can STILL buy them for no higher than the price of building them.)

You can buy one $220,000 Hemi Challenger and the market might go bust next year.  But if you bought ten regular Challengers for $22,000 each, then I'll bet you won't lose a dime.

.

[Orange_Crush]

Actually, I think people have a distorted view of what's going up and what isn't.  The expensive cars selling for hundreds of thousands of dollars are the ones that are artificially inflated.  It's the regular street cars that are have been going up slowly & steadily for a couple of decades.  (And even now at the height of Barrett-Jackson fever, you can STILL buy them for no higher than the price of building them.)

You can buy one $220,000 Hemi Challenger and the market might go bust next year.  But if you bought ten regular Challengers for $22,000 each, then I'll bet you won't lose a dime.

.

Precisely.  Ask anyone who bought a Ferrari on speculation in the early nineties.  Guys bought Ferrari Daytonas for 1.5 or 2 million dollars and, when the market went bust, they couldn't sell them for 300 thousand.

Something is gonna trigger a mass selloff of these cars, doesn't matter what it is, sometimes its nothing.  When that happens, prices are gonna go through the floor.

[Charger_Fan]

Normally I would absolutely not do something like that to get a car...I've learned my lesson on that crap, although in smaller doses.
However...back when I had that shot at that Daytona way back when, I would have DEFINITELY jumped in & done something like that. I only needed around 30K to get it...that would have been absolutely the best savings account I could have ever had!
The hard part would have been to sell it, so I could actually reap those profits.

Id rather have them take out a little more each week and get a big return than have a surpise at the end of the year.

Same here!
I had to pay 2 years in a row, when one of my kids reached 18 years old (one kid per year) & couldn't claim them the same way on taxes.
The first year I had to pay a ton, so I adjusted my take outs...but missed it by a little & still had to pay a few hundred bucks the next year. I'm still paying on that 1st one, BTW.

Bull ,haven't you heard the expression "creative financing". Several years ago a moparts member bought a mid 60's C-barge. He financed the deal. He later had money problems and posted about his money woes and possibly losing the car. moparts members sent him money to help him out. Less than a year later he bought a second car, 73 Charger U code I believe. After showing off his new Charger next to his other car he couldn't understand why some members were upset that he made no effort to repay the people who helped him out instead of buying another car.

That's pretty lame, for sure.
There's a divorced woman at my work. One of her kids ended up in the hospital for a while & she told another co-worker that the bills were piling up. Feeling pity, the co-worker went around to every employee & asked if they'd like to donate a little to help out. Most everyone donated something.

About a month later, she comes in with a nice new expensive watch & makes sure lots of people see it...she can't understand why people are pissed & now treat her differently. She didn't say thanks to anybody other than the first co-worker who felt pity for her in the first place.
I don't know how the kid is doing, don't care either.

Sorry for the hijack, Bull.

[NHCharger]

OC, I'll PM you. Don't want to go spreading dirt, even though it's true.

[chrisII]

just today i filled out paperwork to borow another 3g on my home equity loc. i found a duster that i feel i would be foolish not to buy, and the charger neaded a litle brother (ok i just wanted something shiny and cool to drive while the charger gets done right). i feel that the car is currently worth about $1000 more than the selling price so paying prime interest on it doesnt bother me much, especialy when its tax deductable. is this a good investment? we will see i guess, but i know ill enjoy the car. ive worked since i was 15 to be able to finaly afford a kool , shiny driver and i intend to enjoy it. loosing my mom and an uncle both to natural causes and in there early 50s last year taught me to live for today, never know if we have a future to save for.

[472 R/T SE]

He changed his username, it's HemiDreams.    He owns a Corvette now.

When I got hurt I cashed out the 401k initially cause I didn't know I would go from the hospital to the office at work, ended up using the money to buy a Super Bee.   At the time I really didn't care about taxes, living for today.  I paid 5k initially in penalties and then the government reamed me out at the end of the year.  Very bad choice but I don't give a sh#t, whaddya' do.  Since then, I've "flipped" (as some of you like to say) a few cars to move up the ladder from that Super Bee, and have done good I think.  I consider my little Chally my 401k now.

Before I was hurt we used a home equity loan for the car stuff per accountant for a write off.

[BigBlockSam]

i tried to cash out my 401k to buy a superbird but after all the penalties and taxes , i didn't have enough left to buy the superbird. so i left it alone. i bought all my chargers cash. i was lucky i bought them berfore they got super expensive. Rene

[Old Moparz]

I thought I'd bring this topic back from the dead since anyone answering Bull's original question now might do it differently. The reason I went looking for this thread, was I got a statement at work the other day showing the vested amount I have in two 401K plans. We have profit sharing here & my employer contributes to the plans. Kind of made me feel sick, but it would have been worse if it came right out of my own pocket.

Without actually posting the amount that disappeared on me, if I took the money out myself, I probably could have bought a brand new Challenger SRT8 & still had enough money to go get a crate Hemi for one of my old clunkers.