As you regular readers may remember, my continuing adventures in financial folly include shopping for a wrecked car. I have been frequenting a salvage yard in search of a nice wrecked vehicle that I can buy at auction and repair as a way of saving money on a newer vehicle (because as you may recall I would never buy a brand new vehicle).

In my previous post I mentioned a 2003 Ford Expedition; for those interested I put a long-shot bid on it of $5500, it went for $11,500. Too rich for my blood and far too impractical for my tastes.

My real target is a 2001 Ford Windstar Sport Edition, a nice family vehicle for a guy with a wife and two small kids. The vehicle needs front end repair but has no engine damage, so it has good potential if I can get the winning bid.

… and financing. I have been in California all of last week, so I have had to save securing a loan for this week. My current bank really dragged their heels on the loan application, so I looked at another bank. Thanks to being a second card holder with a person who had trouble with their credit card the second bank declined me, in spite of my explaining that the card had no purchases of mine and I was never contacted for payment before my credit was damaged (no surprises there really, in the banking world your credit report (or score) is law, and no amount of explaining will change the law, so keep your credit rating clean… but that is the subject of another post).

So my next option was a non-bank lender. This of course usually involves interest rates higher than any normal credit card, but I’m looking anyway. I applied yesterday, and I will hopefully get an answer very soon. Why look at a company like InstaLoan or Wells Fargo? In my case I need a $6000 loan, I have a vehicle I can sell for between $4000 and $5000, so within a few weeks I will have paid off between 4/6ths and 5/6ths of the loan (which I confirmed in advance has no early payment or overpayment penalties). The remainder I should be able to pay off very quickly (within 4 months) by re-routing emergency fund money to pad the regular monthly payment (by which I mean money normally used to grow my emergency fund, not money from the fund itself, which would be a no-no since a new vehicle is not an emergency in this case).

Next up I need to see if I am approved, with terms I can live with. If so, I will place a bid on the van. Bidding closes today at 11am, so I should know by noon if I have the winning bid. If I have the van, I will go in and sign the paperwork on the loan and take possession of the van. I’ll then have the van towed to the guy who will be doing the frame repair, which should take a week to ten days probably (which works out nicely since I will be in Europe next week for a meeting). After that it will be a matter of replacing the front trim and hood and painting the front end of the vehicle.

If I don’t win the van, I’m back to square one: looking for a vehicle with the right balance of price, value, and repair-ability. Other options might include checking the local used vehicle listings and lots for a good deal. I probably won’t get something as new for the money, but there can be quality used vehicles out there with less trouble than doing repairs.

And remember kids, YMMV, Don’t try this at home, consult with a professional, offer not valid in all states.

This entry was posted on Friday, April 29th, 2005 and is filed under Automotive, Spend Less. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.