I was reading the thread on “at what point in your life did you say, yes I can afford a horse” and I was struck by the fact that multiple people said they had taken out loans to buy their first horse. I had a trainer suggest this to me a year ago and was honestly pretty shocked by the suggestion given that the maintenance on the horse seems like the real cost and as much as I love horses and riding I would never call a horse a sound or reliable investment. I was interested in how common this practice is and is this something people are doing to be able to afford 5 and 6 figure horses they need to be able to advance competitively or horses that are mainly for fun personal time. No judgement, just genuine curiosity about what practices are out there.
It’s done, but IMO very foolish.
I knew someone decades ago that borrowed $50K for an eq horse for their daughter (but neglected to get insurance on the horse). Horse ended up permanently lame and unrideable about 6 months later. Very, very expensive broodmare for that time.
And they still had to pay off the loan. If I remember correctly, it was a 2nd mortgage. Very expensive lesson to learn.
I’ve taken a loan to buy a horse on two different occasions. The first time it didn’t work out. The horse got very sick within months of bringing him home and, after three years of trying to get him healthy, I had to have him put down. He was only seven years old and his insurance excluded his illness after the first year so I received no reinbursement. It took me another two years to pay off a horse I no longer had. The second time it worked out fine. It took me five years to pay back the loan but the horse ended up being the horse of a lifetime and really catapulted my career.
All that being said, I would really rather not go into debt to buy a horse again. It’s far too risky and, like with my first horse, insurance isn’t always a guarantee of recovering the money should something happen to the horse. In recent years I’ve been purchasing and raising babies, which is also risky, but it has been less-so for me up to this point.
There’s an old saying: Never invest in anything at eats.
There’s an older saying: Horses are the “sport of kings.”*
In the modern world horses are luxury goods, like trips on the QEII or a week at the Waldorf. If you can afford to pay for this type of luxury goods then you’re golden.
Taking out a signature loan would be a bad idea as they carry very high interest rates and can seriously damage your credit rating if improperly used.
Taking out a loan against an asset (a savings account, house, 401K, margin loan, etc.) might make slightly more sense as you’d pay a much lower interest rate and might even get a tax deduction on the interest (a second mortgage would do this; I don’t know about things like credit cards backed by second mortgages).
Better, though, to save the money and pay cash. Or get the seller to take a down payment and pay them off over time (this, by the way, has it’s own issues but that’s for another day).
G.
*Yes, I know, it’s “racing is the sport of kings.” I’m exercising the privileges of my “poetic licence.” 
I borrowed money from my mother to buy one of my first horses. The loan was for part of the purchase price and it was less than $2,000 and paid back in less than 9 months. I got a good deal on the horse.
[QUOTE=polkadotedpony;8586093]
I was reading the thread on “at what point in your life did you say, yes I can afford a horse” and I was struck by the fact that multiple people said they had taken out loans to buy their first horse. I had a trainer suggest this to me a year ago and was honestly pretty shocked by the suggestion given that the maintenance on the horse seems like the real cost and as much as I love horses and riding I would never call a horse a sound or reliable investment. I was interested in how common this practice is and is this something people are doing to be able to afford 5 and 6 figure horses they need to be able to advance competitively or horses that are mainly for fun personal time. No judgement, just genuine curiosity about what practices are out there.[/QUOTE]
I borrowed money from my line of credit to pay for my horse, which price did get into the 5 figures with shipping and taxes.
I never did, nor would I now, call my horse an “investment”.
I don’t really see a problem with borrowing money to buy a horse, or a boat or maybe a motorcycle if that’s what you’re into.
That is assuming you can afford loan repayments on top of your usual monthly upkeep costs (board/lessons/vet etc).
People who are not the mega rich should buy horses that they can afford to pay for. If you can not afford to buy an expensive horse with a proven show record, THEN you can not afford to go to the shows that this horse is meant for, and this life is, sadly, not really for you. Instead you are one of those riders who has to make their own horse, from scratch. Learn how to select, and how to train, and how to TRULY ride effectively. You may not be going to the fancy expensive horse shows, but you will gain a valuable lesson, both in horsemanship, and in life. Also, there is no thrill that equals success due to your own work, should you manage at some point to get your cheapie horse into top competition, and defeat those who have purchased expensive horses that someone else has developed. If someone else has to pay $100,000 to attempt to defeat you in open competition, and fails, someone has some explainin’ to do.
So no, I don’t think that it is a good idea to go into debt to buy a horse. An expensive horse’s value ALWAYS goes down, with age, with time, with bad luck. So it is a losing proposition, and depending on insurance to cover your ass is always risky, and doesn’t keep the horse alive and functional. Buying a cheap horse and escalate it’s value through training and competition is the far more economic situation IMO. Then sell it at the right time, to someone who has lots of money to burn.
I don’t know how prevalent it is, but agree it is very risky. If doing it I would ensure a pretty comprehensive insurance plan to compensate a loss. Otherwise you could be in debt for years for a horse that is lame or worse.
I bought my first horse with an unsecured loan that my parents were cosigners on. If I missed a payment, if affected their credit as much as it did mine. I was 22 at the time. I sold the horse before I finished paying the loan off (which I did pay off a year early).
Having done it - I would NEVER recommend it. NEVER.
To each their own.
As long as the horse gets paid off, is happy and the bills life sends your way can be paid comfortably… who cares? Shoot, at least they qualified for the loan. Chances are their credit isn’t horrible and are possibly responsible.
I don’t understand why anyone is using the word “investment” in this thread? Are we talking about buying horses with a loan with the intention of selling them to pay off the loan?
I borrowed money to buy my horse with an unsecured LOC. But only because the horse I wanted happened to be twice my budget. But I had/have no intentions to sell, and I’ve had him for almost 8 years now, and I’ve already enjoyed him enough that I don’t feel he owes me anything. And he’s only 11 this year so maybe I will get to enjoy him for another 20 years… so really a little loan at the beginning isn’t a huge deal to me…
Back when I worked in a compensation structure that relied heavily on lump sum bonuses, I often borrowed money for big ticket things knowing the next bonus would pay it off. I’m not sure I would do it if I had to make the monthly payment and no extra until it was paid off.
Seven years ago I bought my big show horse with an unsecured personal loan. It was an opportunity that wasn’t going to come around again and that horse took me on a magic carpet ride beyond my wildest dreams. I’ve never regretted it for an instant, but I wouldn’t necessarily recommend it to others. You have to weigh what you’re comfortable with and what the worst case is.
Insure the horse of course, if they die, you’ve got the insurance money. If they become “unusable” but don’t die, you’ve still got to pay the loan. But if you’d paid it outright, you’d still have paid for the horse. It worked out for me.
[QUOTE=Gainer;8586135]
It’s done, but IMO very foolish.
I knew someone decades ago that borrowed $50K for an eq horse for their daughter (but neglected to get insurance on the horse). Horse ended up permanently lame and unrideable about 6 months later. Very, very expensive broodmare for that time.
And they still had to pay off the loan. If I remember correctly, it was a 2nd mortgage. Very expensive lesson to learn.[/QUOTE]
How is the lesson learned? How would the circumstances be different if they had paid cash up front for the horse?
Or is the lesson “don’t buy expensive horses”?
Wow, I didn’t know people took out loans to buy horses. Then again, I don’t know anyone who’s doing more than just local shows.
I would never take out a loan for a horse, heck, I won’t even take out a car loan (saved up and bought used).
So far I have 5k saved up, will probably need more. I doubt horse prices will be dropping any time soon.
I learned something new from this thread. I had no idea people took out legitimate loans for “normal” priced horses. The only times I had ever personally known of someone taking out a loan on a horse was with very expensive competition horses (racing and show).
The most expensive horse I have ever purchased in my life was $450 from New Holland. The majority of them have been free. I’ve grown up around horses my whole life and have been very blessed to have a steady stream of nice yet cheap animals that have been able to take me where I want to go. The concept of paying a lot for a “pleasure” horse has always been foreign to me. You know the saying, most people don’t need a $30K horse-- they need a $1000 horse and $29K worth of lessons. 
[QUOTE=Texarkana;8586544]
I learned something new from this thread. I had no idea people took out legitimate loans for “normal” priced horses. The only times I had ever personally known of someone taking out a loan on a horse was with very expensive competition horses (racing and show).
The most expensive horse I have ever purchased in my life was $450 from New Holland. The majority of them have been free. I’ve grown up around horses my whole life and have been very blessed to have a steady stream of nice yet cheap animals that have been able to take me where I want to go. The concept of paying a lot for a “pleasure” horse has always been foreign to me. You know the saying, most people don’t need a $30K horse-- they need a $1000 horse and $29K worth of lessons. ;)[/QUOTE]
I think you may have a very different idea of “normal priced horses”.
[QUOTE=PlanB;8586552]
I think you may have a very different idea of “normal priced horses”.[/QUOTE]
“Normal” price to me is about $2,000 to $20,000, as I feel like that’s the range most people purchase horses for pleasure and low level competition. Obviously that’s a big range. But when I sold horses regularly, I advertised most of my horses between those prices, with the upper end being for the (rare for me) truly proven competition mounts. Of course, I picked up most of the ones I sold for free or cheap off the track. And I did quite well for myself, until I got burned by several horses with major, costly issues in a row.
[QUOTE=Texarkana;8586561]
“Normal” price to me is about $2,000 to $20,000, as I feel like that’s the range most people purchase horses for pleasure and low level competition. Obviously that’s a big range. But when I sold horses regularly, I advertised most of my horses between those prices, with the upper end being for the (rare for me) truly proven competition mounts. Of course, I picked up most of the ones I sold for free or cheap off the track. And I did quite well for myself, until I got burned by several horses with major, costly issues in a row.[/QUOTE]
I would agree with that.
I also don’t think there is anything wrong with taking out a loan for the purchase… it’s pretty common for a lot of recreational purchases like boats, Seadoos, ATVs, snowmachines, etc.
Sure. I borrowed money from my dad to buy my first horse - he was only $1500 but I was a poverty-stricken 3rd year law student (and by definition not in my right mind) at the time. Daddy was thrilled to loan me $1000 to buy a paint pony - seriously. One of his big regrets was that Mama wouldn’t let him buy me a terrific little paint pony he found when I was a horse-crazy little kid. I paid him back every dime, too.
In fact, I bought Conjure “on time” from my BO-before-last. He also wasn’t very expensive but I was just starting my own practice and money was kind of tight. The deal was I’d board him with her until I paid him off. Worked out just fine.
