In normal circumstances using a HELOC for a car purchase would not be smart. But times are different right now. If he has to finance its not the dumbest thing. Current used car rates are roughly 4+%, while HELOC rates are 3% (depending on your finances, equity etc). The mistake people would make is paying the minimum amount which would make it a 30yr loan. You just have to do the math and figure out how long you want to pay for it and make that your monthly payment.
Obtaining financing for an LJ
- Thread starter LJtheunicorn
- Start date
In normal circumstances using a HELOC for a car purchase would not be smart. But times are different right now. If he has to finance its not the dumbest thing. Current used car rates are roughly 4+%, while HELOC rates are 3% (depending on your finances, equity etc). The mistake people would make is paying the minimum amount which would make it a 30yr loan. You just have to do the math and figure out how long you want to pay for it and make that your monthly payment.
Then get an unsecured personal loan from whomever will give you one at decent terms. It may be possible to borrow from yourself at better terms than you will get from any finance company by tapping an IRA for the sum you need and paying it back before the tax penalty kicks in. You'll have to do the math. I wouldn't do it, nor would I borrow against my home to purchase a toy, but you don't want financial advice.
There are sound financial reasons very few loan companies will accept a 15 to 17 year old vehicle as collateral and those who will typically impose usurious terms to compensate for the risk.
Best of luck in your jeep search.
Tray Burge
TJ Addict
I respectfully disagree, taking equity out of the largest appreciating asset next to your IRA or 401k to purchase a depreciating liability is not a smart thing to do.
But, hey I get they're still in that "I want it and I want it now" stage of life like most of us go through, but it's till a dumb move to do a HELOC for a depreciating vehicle.
Using equity from your home does not stop the home from appreciating. You just owe more and therefore have less built up equity until you pay off the HELOC. Simply having an open HELOC (with zero balance) does not lower your equity. Its an open line of credit.
I completely understand your point though. Any car is a horrible investment. However, in this case, do you want to pay 4+% or 3%. Also, how much are we talking about here 10-14k?? He's not buying a 100k car. Its a drop in the bucket...well, I guess that depends on the value of your home.
Tray Burge
TJ Addict
Not to give anymore unsolicited financial advice, but ratherly some fatherly-advice, I will simply say that your life will change drastically and dramatically post-children. I'm not sure what your timeline looks like for children, but from a practicality standpoint, an LJ is simply a terrible choice for a family vehicle (unless that it's simply a "toy" that will only be used under limited circumstance and not hauling babies around for a number of years). Before you sign up for a vehicle loan that 99.99% of financial advisors would advise you against, it may be worthwhile to spend some time with some family friends or neighbors and ping their brains too. It is easy to get attached to an idea/want/need pre-kids that will absolutely make you laugh (or cry!) post kids
reservoir dog
Member
I’ve used cash advances from credit cards with low or no fees to make purchases in the past or float things,
OP
Bringing this thread back to life for a quick moment. Went with LightStream and their process was awesome! After going through application and speaking to my bank guy they’re more common than I first thought and I heard nothing but good things. Here’s the new toy!
reservoir dog
Member
OP
OP
Thanks guys! Let the customizations begin...... first will be a lift to accommodate the tires that can’t do full articulation at their current size.
Then you need to add a snorkel, I hear it helps keep chicken feathers out of the engine.
Signed,
The Guy That Was Just Reading The Snorkel Post.
This is great advice.
The most common financing for a good LJ build is a Swiss bank account and fake i.d. and tax #.
We could tell you more....but we would have to kill you.
Tray Burge
TJ Addict
We had this discussion on page one, while I agree with you, @LJtheunicorn does seem to have a handle on his expenses and what he can afford. He is of a younger generation than me and that generation wants to enjoy life at an earlier age...I should probably learn a little of that before I croak and leave my kids everything.