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Curious George
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168 Posts
Discussion Starter #1
So, I've done some searching, and most threads were 10 years old...

I figure, we should start a financing discussion thread to get more folks onboard (including myself)

It's odd that FF doesn't have a Financing link on their homepage, but I found it with a simple search https://www.factoryfive.com/order-a-kit/financing/

Rocket Loans by Quicken Loans Features:

  • Loan approval amounts are between $2,000 - $35,000 (Minimums vary for some states, see below)
  • Loan terms can be either 36 or 60 months
  • Depending on the credit, APR will be between 5.98% - 28.99%
  • The customer receives their funding within 24 hours
  • There is no pre-payment penalty
  • Rocket Loans will approve loans with a credit score as low as 650
  • Not available in these states: Nevada, Iowa, West Virginia, North Carolina
Minimums are different in these states: Ohio-$5001; New Hampshire-$10,001; Massachusetts -$6,001; Georgia-$3,001; New Mexico-$2,501.

What other options have you builders used?

I know, there are some of you who lump-payment their cars (lucky guys) :silver: :red: :grape: :gary: :eek:range: :blue2: :yellow: :grey: :semitrailer:
 

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Registered
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438 Posts
Holy cow, the high end of those interest rates! When I researched it, I found that many, many went the lump-sum route, and that's what I ended up doing after exploring things a bit. It took years of pinching and saving, to the sacrifice of some other things, but in the end, I'm glad I went that route. I created a separate account and direct-deposited a percentage of my paycheck into it every month. I didn't touch that account except for things related to the build, and I put in extra money whenever I could. In the end, I was able to write a check for the kit, and then I started saving for the motor. Once I had enough for the motor/transmission, I was able to purchase it, and I started saving for body work and paint. I've had enough to do that for a bit now and am just trying to get this thing completed into go-kart so I can send it to Jeff K. for his magic touch. All of this has happened with the full agreement of my wife. Happy wife, happy life.

As for other options, personal lines of credit with fixed interest can be used, though they have size limits if they are not secured. I would stay away from any sort of home equity situation, personally, though I have heard of a few others who have gone that route. I just can't imagine putting any sort of risk on my home equity. Credit cards are a possibility, but the interest rates would suck unless you can get some sort of special.

Best of luck to you!

--Nathan
 

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Junior Charter Member
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2,852 Posts
Not to be a wet blanket, but financing something that is essentially a toy, is not a good financial move.
Save your pennies, skip a couple coffees, beers, and dinners out, and buy when you can actually afford it. The good thing is that you don't have to buy it all at once. You can basically build the entire car without an engine and transmission, or wheels and tires. Paint and bodywork, a major expense, can be put off indefinitely and you can still drive the car.

28.99% - WOW!

Let's say you borrow $40,000. That is a low-ish budget for a pretty good car.
You end up paying $76,166. You are paying for two cars, but you only get one.
 

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Registered
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1,327 Posts
It's a toy.

I strongly suggest you save up and pay cash. I wouldn't recommend financing it- or anything else for that matter (except a home).

So that means you can't order it today...but I've never heard of savers remorse.

If you need help figuring out how to do this, I recommend following the seven baby steps advocated by Dave Ramsey. It's free and it works!

https://www.daveramsey.com/

HTH,
Will
 

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Caress of Steel
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2,109 Posts
Borrowed against 401k, done it on all three builds so far. Paid them all off early. Couple of times the interest I was paying myself back was more than it was making in the markets. So it was kinda like saving but with more instant gratification. :nerd: Waiting till you can pay cash is smart in some ways but you're just putting off living your life till later.
 

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Curious George
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168 Posts
Discussion Starter #8
Borrowed against 401k, done it on all three builds so far. Paid them all off early. Couple of times the interest I was paying myself back was more than it was making in the markets. So it was kinda like saving but with more instant gratification. :nerd: Waiting till you can pay cash is smart in some ways but you're just putting off living your life till later.
that's an interesting model for sure! >:)
 

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Curious George
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168 Posts
Discussion Starter #9 (Edited)
It's a toy.



I strongly suggest you save up and pay cash. I wouldn't recommend financing it- or anything else for that matter (except a home).



So that means you can't order it today...but I've never heard of savers remorse.



If you need help figuring out how to do this, I recommend following the seven baby steps advocated by Dave Ramsey. It's free and it works!



https://www.daveramsey.com/



HTH,

Will


thx - i'm way past the 7 baby steps, just was curious as to people's motives, and approach... I can't imagine being a guy that finances a kit, and doesn't finish it - yet pays on it monthly...
 

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FFCobra Craftsman
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22,118 Posts
I did a home equity line of credit. Now that income taxes are different that may not be such a good idea from the pure financial point of view. Took me 5 yrs to pay it off, but, hey I have an FFR that I could not have had otherwise.
 

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Senior Charter Member
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2,236 Posts
I went the buy what you can when you can route.

In the mid 2000's I asked the financing question and for the most part got the "its a toy - don't finance" advice. I do not recall factory Five having financing back then either. I am averse to paying much in interest for anything so I went the pay as you go route.

My story:
In 2008 I bought the kit with the options I wanted. A few months later I bought a running 1991 Mustang donor that had a wore out 2nd gear. I thought I had what I needed to build my dream car. After disassembling the donor I quickly realized I did not want the bulk of the parts off of that Mustang on my dream car. (Note: If you go the donor route get a low mileage donor in good condition.) The donor I purchased trying to get a car on the road sooner rather than later was a mistake. I got bogged down with reassembling the engine and wiring and let the kit set for years while life and family got in the way (I don't regret letting life and family get in the way at all), all the while paying insurance for a heap of parts in my garage. In 2016, timing and finances were up to the task and my wife and I decided to have someone finish the car, minus body work and paint. Right now I am in my late 40s and I have a had the kit for 11 years, only 3 of which I have been able to drive it, and it is still sans body work and paint. I can say I never financed a dime for my Cobra though. The pay as you go route worked for me and I am still not done yet.

For me, I'd finance a finished car or pay as you go without financing.
 

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Not a waxer
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11,553 Posts
I subscribe to the "don't finance a toy" school of thought (heck, at this point in my life I don't finance anything) and paid cash.

Jeff
 

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Registered
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2,350 Posts
Never ever paid cash for a car except for the COBRA.
 

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Charter Member
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6,120 Posts
I paid cash but it is spread out over years. Buy the kit and build it for 2-3 years the damage is spread out!!
 

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Charter Member
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354 Posts
My wife had some stock options at work that had split several times and she was ahead quite a bit so she sold some to pay cash for my first MKII. It was totaled in an accident so I bought a MKIV with the proceeds plus kept the engine, transmission, rear end, and a lot of the smaller items. Almost finished and I’m still 12K to the positive from the insurance payment! Pretty much just have bodywork and paint left.

I’m in the pay cash for a toy group, but I don’t advocate getting into a car wreck to come up with the funds.:surprise:
 

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FFCobra Craftsman
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22,118 Posts
Paying cash for this or that is fine. I am envious of those who could do that. I almost never did until about 8-10 yrs ago when my wife started earning what was/is big $s for us. And even now her $ go mostly for house/home stuff. But I am not stupid either. I use credit smartly. I don't over extend myself. I spent about $4k on an engine upgrade to a 408. We moved in the middle (a $200,000+ bump in house value because of her being able to) which put the 408 on hold for a year. I paid off about $3k on that card while on hold, and then the rest was easy. then suddenly FFR brought out the 2015 IRS. Called them and asked questions and immediately put the $2500 on a card. Cash flowed the other grand or so while paying off the card. Bought nothing for the FFR until that big charge was paid. My other hobby is guns. I have a general use card, an FFR card, and a gun card. I watch what the balances are. I buy something and wait to pay off that card before I buy something else. Sometimes the balance on one card will halt buying on the other two cards. I see nothing wrong w/ using credit as long as it is used smartly.
 

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Registered
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264 Posts
In am in the pay cash for toys camp also. Even if you have to build the car in stages. I mean getting the kit built and then get the engine/trans. After all, they will be cheaper in the future. Plus the more time you have to source the drive train, the better the chance you will get a good deal. You do not want to pay more for rushing. The biggest thing is to stay focused on the end. Do not let feature creep double your budget. (Good luck with that one. I still have not mastered it yet). As for using credit cards, that is fine as long as you pay them off at the end of the month. You do not want to be paying interest on all of your purchases when you make them.

And remember to get presents for your wife and not your car. Spending $30 on flowers has a much higher ROI than something shinny for the engine bay.
 

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Registered
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169 Posts
Not to be a wet blanket, but financing something that is essentially a toy, is not a good financial move.
Save your pennies, skip a couple coffees, beers, and dinners out, and buy when you can actually afford it. The good thing is that you don't have to buy it all at once. You can basically build the entire car without an engine and transmission, or wheels and tires. Paint and bodywork, a major expense, can be put off indefinitely and you can still drive the car.
The problem with this line of reasoning is then nobody (read very few) would be able to enjoy their dreams. You're correct in the grand scheme of things, you're financing a toy. People do it all day every day...buying a Corvette, Harley, RV, Cobra etc. that's what credit is for.

On the other hand, taking out a loan with a 20+% finance rate is a terrible decision, but most shouldn't have to go that route.

As far as other finance routes there's a company called Lightstream online I have used twice now. The process couldn't be any easier and they have very good rates. I highly recommend them as a company.
 

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Registered
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Borrowed against 401k, done it on all three builds so far. Paid them all off early. Couple of times the interest I was paying myself back was more than it was making in the markets. So it was kinda like saving but with more instant gratification. :nerd: Waiting till you can pay cash is smart in some ways but you're just putting off living your life till later.
Said better than I!

Tomorrow is not guaranteed!
 

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Registered
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I was too young to want to touch my retirement funds so I saved until I had enough for the Basic Kit (~$14,000). Then I cash-flowed the build as funds allowed. If you don't let everyone on this forum talk you into spending way to much, you can throw a few hundred a month at the build and be done in a year or two. I enjoyed shopping around for killer deals and I think I built mine for a very modest budget. I think the car is just so much more enjoyable to drive knowing I have no payments.
 
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