A Special Kind of Car

Jason found a 1974 Pantera GTS that has been wrecked. He has $600 in it, and someone offered him $25,000 for the car as-is. Should he pull money out of his Thrift Savings Plan in order to repair the car?

QUESTION: Jason in Louisville found a 1974 Pantera GTS that has been wrecked. It only has 17,000 miles on it. He has $600 in the car so far, and someone offered him $25,000 for the car as-is. Should he pull money out of his Thrift Savings Plan in order to repair the car? Dave warns Jason off of borrowing money to repair this car.

ANSWER: I don’t borrow money, and I tell people not to borrow money for anything, especially for a deal like this. I’m a car guy. I’m not as big a car guy as you, but I love cars. I grasp the concept of what you’re doing, but you’re going to have a rebuilt car here. It may or may not be the value of the one you pitched out there, but it’s probably worth a hundred either way. But it’s certainly not original because you’ll have to go in there and fix it. You have to ascertain some of that as far as the process goes.

But in your case, you simply don’t have the money today to spend $15,000 on this car because you just came through a divorce and you’re cleaning up everything. I would do one of two things if I were in your shoes.

My first choice would be to sit down with your parents and show them exactly what your plan is and show them the evidence so they participate in the dream with you, thereby giving them a little bit of patience to let the car sit at their house. Then get yourself straightened out and take some overtime and save up $10,000 or $15,000 so you can fix the car.

That means fixing the car next year and selling it six months or so after that. That’s later than you planned to, but I think you can do that and I think that’s a reasonable choice. It would be the one I would do.

The second choice is one that I don’t like as much, but it’s the only one I see on the table, and that’s to sell it for $25,000. I think that’s a shame since you are kind of into this thing and you have the ability to see it put together and see this project through and those sorts of things.

I might change my answer. I’d say option one is to save up the money over the next year, which is still a good option. Option two is to learn about the market a little bit and poke around with some car guys and auction guys and rebuilder guys and see if you can’t get someone to give you a certain price as-is. If they do, take it.

But if you are in love with this thing and want to see it put together, then save up the money. But I wouldn’t tell you to borrow money. I would be in this deal, but I wouldn’t be in this deal except with cash.