Borrow $ against P-Car to payoff credit cards? What are my options?

david914 · 08-11-2009, 06:21 PM

I have some credit card debt that I would like to roll over into a fixed rate, fixed term loan. A home equity loan is not an option for me. Capital One is going to raise my interest rates effective January 2010 to prime plus 14.65% and I am not in a position to get the balances paid off any time soon. I own my '86 Carrera outright and am contemplating borrowing money against it to pay off the two cards (~$7800 balance). I called my bank and they don't do loans on cars that old. Any ideas?

Dave L · 08-11-2009, 06:24 PM

unsecured line of credit? I have one that I have used for a used car. 4.75%

Gogar · 08-11-2009, 06:33 PM

Can you do one of those 4.99% fixed offers for the term of the balance and leave the car out of it? It will cost you about $150, but you'll save $150 in about 4-5 months at the lower rate.

pwd72s · 08-11-2009, 06:38 PM

Quote:

Originally Posted by david914

I have some credit card debt that I would like to roll over into a fixed rate, fixed term loan. A home equity loan is not an option for me. Capital One is going to raise my interest rates effective January 2010 to prime plus 14.65% and I am not in a position to get the balances paid off any time soon. I own my '86 Carrera outright and am contemplating borrowing money against it to pay off the two cards (~$7800 balance). I called my bank and they don't do loans on cars that old. Any ideas?

Changing short term debt into long term debt is a slippery slope...often leading to bankruptcy. It could work...if you cut up your credit cards...go on a strictly cash basis.

david914 · 08-11-2009, 06:41 PM

Not sure why my bank didn't offer an unsecured loan as an option, but I can explore that option. Gogar, are you talking about those balance transfer offers from other credit card companies?

WilsonTC · 08-11-2009, 06:43 PM

This is a simple formula:

Sell car + pay off credit card = no debt

porsche4life · porsche4life's Garage

Quote:

Originally Posted by WilsonTC

This is a simple formula:

Sell car + pay off credit card = no debt

Exactly. Then save up and buy another pcar....

legion · 08-11-2009, 06:45 PM

Quote:

Originally Posted by WilsonTC

This is a simple formula:

Sell car + pay off credit card = no debt

That's what I did.

I will buy another when I have the cash on hand and the budget to support it.

That said, if the 914 is your only car, that may change things...

david914 · 08-11-2009, 06:46 PM

I'm actually looking to shorten the payoff time (~3 years). At the rate I'm going, the credit cards won't be paid off for a longer period of time than that.

WilsonTC · 08-11-2009, 06:48 PM

Quote:

Originally Posted by legion

That said, if the 914 is your only car, that may change things...

From first post:

David Dryden
'74 914-6 GT Replica (gone but not forgotten )
'86 911 Coupe (My baby)
'01 Toyota 4Runner (hauler)

porsche4life · porsche4life's Garage

Simple. Sell the 911. Drive the Toyota until you can afford to buy another fun car.

david914 · 08-11-2009, 06:51 PM

Not that I haven't considered it, but selling my Carrera is not my first choice as it's a VERY nice example and would be difficult to replace. Sadly, the 914 was sold a couple of years ago. It had been in my family since new.

Gogar · 08-11-2009, 07:04 PM

Quote:

Originally Posted by david914

Gogar, are you talking about those balance transfer offers from other credit card companies?

Yes. Usually you can get a 4-6% balance transfer offer from either a card you already have, or a new one, depending on your credit.

There's lower percentage offers, but the term is usually 6 months and then the rate goes back to normal.

There's almost always a fee, which can be as high as 4% of the balance ($7800 would be $312, ouch), but the companies ALMOST ALWAYS cap that fee at $50 or $75, which you will recoup in savings after about 2 months at prime+14.65%.

I did myself a "small business loan" for about 10K. I purchased the thing I needed for $10K on my Providian card, and the same day I opened a Capital one card and did a 4.99% "till it's paid off" balance transfer. It's the only thing I've ever put on the Capital one card and I'll likely cancel the card when I finish (about $3K left.)

IMO that's a really great way to get a low rate uncollateralized loan, as long as you have the discipline to not mess with it and pay way more than the minimum.

Don't put anything else on a card you have a balance transfer on, because the new purchases get paid off LAST, after the balance transfer, and you waste a lot of money that way.

HardDrive · 08-11-2009, 08:22 PM

This post = much of what is wrong with America.

campbellcj · 08-11-2009, 08:46 PM

Obviously paying-off the debt is the best option, even if it means selling some car(s) or other stuff.

If you are committed to keeping the cars then personally I would never swap unsecured credit card debt for a secured car loan. Sure you will probably pay a bit more interest on the cards, but if you ever had to stop paying on them, it would take ages for them to sue you and come after your assets compared to a car loan where you'd have what, 2-3 months tops before the repo-man?

aigel · aigel's Garage

Quote:

Originally Posted by david914

Not that I haven't considered it, but selling my Carrera is not my first choice as it's a VERY nice example and would be difficult to replace.

It would not be difficult to replace when you have money again. Carreras are not rare cars. Do you owe on the Toyota? May be time to get debt free and start saving for a new toy down the line. I would do it.

George

Geronimo '74 · 08-11-2009, 09:59 PM

Quote:

Originally Posted by david914

Not that I haven't considered it, but selling my Carrera is not my first choice as it's a VERY nice example...

A very nice example should bring you a quite a bit more than 7.800$...

Sell the car, pay the debt. (Selling the 911 is no fun, but hey, how much fun is being in debt...)

Tidybuoy · 08-11-2009, 10:52 PM

Quote:

Originally Posted by WilsonTC

This is a simple formula:

Sell car + pay off credit card = no debt

No, no, no, no, no!

Part out car on eBay = pay off debt & buy a replacement 911 with leftovers.

svandamme · svandamme's Garage

it's all fun till something happens to the car, a crash or major component that blows up

IF the car is now worth the amount of your debt, sell it and save up for another one.
That's what i'm doing... it sucks to see a nice 911 on the road now, but it doesn't weigh up for the peace of mind , of not having any debt (other then a low mortgage).

It works in more way then one, while without a porsche, you are also without porsche maintenance costs, and without the "needing upgrades" costs...

svandamme · svandamme's Garage

Quote:

Originally Posted by Tidybuoy

No, no, no, no, no!

Part out car on eBay = pay off debt & buy a replacement 911 with leftovers.

i parted out a 3.2 , one that has been in storage with customs for 9 years, and as such was as fresh as can be, with 16x9 inch fuchs... leather sports seats...

Parting out takes A LOT of time, and if the car is a nice example, i doubt you will make to much profit over selling it complete, definately not if you factor in hours spent parting it, and then dealing with the buyers.

The only reason we parted out the 3.2 we got, was that it was stripped of chassis numbers by customs (Dutch law, let's hope they never confiscate something with rare chassis numbers and history), and had bought it from customs for about 4K ( and got 10 K gross out of it, keeping in mind that engine components were almost "as new")