Buying horse with loan? Is this common?

[polkadotedpony]

[QUOTE=saultgirl;8586368]
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? [/QUOTE]

I agree that when most people buy a horse they are looking to get their value in enjoyment of the horse rather than money via resale. I used the term “investment” in my original post because I typically think of loans as used to buy items that tend to hold their value over time or at least depreciate at a predictable rate like a car or boat or home. Even though a car loses value over time you can still make some of your money back and will have a good idea of its worth a few years down the line when you’re further into the loan. A horse not so much.

Its interesting to hear different takes on the topic. When I first heard the suggestion I thought it was about as financially sound as recommending someone voluntarily carry a balance on their credit card, but clearly loans for horses have worked out well for some people and their situations on this thread.

[Ladylexie]

It is quite common in the show horse world where people with plenty of money, but, not quite enough to cover the purchase price of a $150,000 horse need to come up with cash. One local ASB barn used to have a bank person come in and give talks about how to get loans using your house as equity and all kinds of ways to come up with money for horse etc. Kind of a win win situation for the trainer since they got big commissions and nicer horses in the barn.

[Brynn]

Not a loan, but my first horse was purchased on a credit card

[Gainer]

[QUOTE=PlanB;8586423]
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”?[/QUOTE]

I think the main lesson learned is don’t buy an expensive horse on credit, unless it’s insured for loss of use/mortality.

I also think it’s ridiculous to buy a horse that requires a second mortgage on your home. If you don’t have the disposable income to pay for the horse, perhaps you should set your sights a bit lower.

Also, the eq rider I was talking about quit riding a couple of years later. Seems she wasn’t all that great of a rider when she didn’t have a push button horse.

[saultgirl]

[QUOTE=polkadotedpony;8586847]
I agree that when most people buy a horse they are looking to get their value in enjoyment of the horse rather than money via resale. I used the term “investment” in my original post because I typically think of loans as used to buy items that tend to hold their value over time or at least depreciate at a predictable rate like a car or boat or home. Even though a car loses value over time you can still make some of your money back and will have a good idea of its worth a few years down the line when you’re further into the loan. A horse not so much.
.[/QUOTE]

I’m still not understanding this line of thinking. Whether the item depreciates in value or not, what difference does it make if you took out a loan to pay for it?

[saultgirl]

@Gainer;8586990

I think the main lesson learned is don’t buy an expensive horse on credit, unless it’s insured for loss of use/mortality.

Again, what difference does it make if you paid for the horse in cash or credit? Don’t by an expensive horse unless it’s insured for loss of use/mortality. How you paid for it is neither here nor there.

[Chocoholic]

I know people who have taken out a loan to buy a horse, but I wouldn’t do it myself. I couldn’t afford it. My income would not allow me to pay board AND a loan payment. I paid $1,000 cash for a horse that I adore.

[saultgirl]

[QUOTE=Chocoholic;8587055]
I know people who have taken out a loan to buy a horse, but I wouldn’t do it myself. I couldn’t afford it. My income would not allow me to pay board AND a loan payment. I paid $1,000 cash for a horse that I adore.[/QUOTE]

That would be a good reason to not buy a horse on a loan!

[Hulk]

I always said horses are like a super expensive gambling habit. I never lay more money on the table than I am willing to eat the second you purchased the dang thing. So if its a loan or saved up money it matters not, its a risky investment. As long as you pay the loan regardless of the outcome I don’t see any difference.

[Dewey]

[QUOTE=polkadotedpony;8586847]
I agree that when most people buy a horse they are looking to get their value in enjoyment of the horse rather than money via resale. I used the term “investment” in my original post because I typically think of loans as used to buy items that tend to hold their value over time or at least depreciate at a predictable rate like a car or boat or home. Even though a car loses value over time you can still make some of your money back and will have a good idea of its worth a few years down the line when you’re further into the loan. A horse not so much.

Its interesting to hear different takes on the topic. When I first heard the suggestion I thought it was about as financially sound as recommending someone voluntarily carry a balance on their credit card, but clearly loans for horses have worked out well for some people and their situations on this thread.[/QUOTE]

You may be right in using the word “investment” here, but I always thought an investment would most likely appreciate in value over time like a house, an education, or stocks. Anything that depreciated over time like a car (unless it was some rare antique model) would not be an investment but a durable good.

A horse I would not consider an investment unless I was buying a young performance horse I knew I could make money from as a stud.

[clanter]

[QUOTE=Hulk;8587082]
I always said horses are like a super expensive gambling habit. I never lay more money on the table than I am willing to eat the second you purchased the dang thing…[/QUOTE]

but unlike a gambling loss which ends at the loss at the table the horse continues to consume dollars

[Zipsmom]

I purchased my horse on a payment plan with the seller. I gave her 80% up front and paid off the rest in about 3 months. Had a bill of sale stating that horse was to remain at her barn until full payment was made, then I was free to leave if I chose. This was not a very expensive horse. He is still with me at 24! I personally would NOT take out a bank loan for a horse.

[Belmont]

My did it for me when I was a kid. She was a single working mom, and I was a horse crazy kid. Somehow, she always kept me horsed, in lessons, and showing. She also always kept my sister in competitive dance/cheer, including out of state competitions.

Everytime we sold one, she would pay off their remainder of the loan (if there was one) though many times it had been paid off by then. I’m not sure how we managed to never get buried, but she pulled it off.

[tabula_rashah]

I don’t see why it really matters- as long as the person pays the loan off, then it’s not really anyone else’s business what they do. That said, the most I’ve ever paid for a horse is $1500.00.

[AirForceWife]

I just did this, I have a financial payout that’s coming but found my dream horse and don’t want to miss out on it. In the mean time while I wait I took out a personal loan that’s a secured and low rate (thanks credit score) to buy this guy.

[Hulk]

[QUOTE=clanter;8587369]
but unlike a gambling loss which ends at the loss at the table the horse continues to consume dollars[/QUOTE]

I couldn’t agree more and then some. But I tend to not keep a real close tally on my mistakes, lest I might fear moving forward.

[Chall]

Well, a cheap h orse costs as much as an expensive horse if they are at the same barn.
Not sure where i am going with that train of thought…

[PlanB]

[QUOTE=Gainer;8586990]
I think the main lesson learned is don’t buy an expensive horse on credit, unless it’s insured for loss of use/mortality.

I also think it’s ridiculous to buy a horse that requires a second mortgage on your home. If you don’t have the disposable income to pay for the horse, perhaps you should set your sights a bit lower.

Also, the eq rider I was talking about quit riding a couple of years later. Seems she wasn’t all that great of a rider when she didn’t have a push button horse.[/QUOTE]

Now this just sounds like sour grapes.

[Halt_Near_X]

[QUOTE=Zipsmom;8587441]
I purchased my horse on a payment plan with the seller. […] I personally would NOT take out a bank loan for a horse.[/QUOTE]

Out of curiosity, why were you ok doing installment payments to a seller but not to a bank?

Was it just the free interest that people tend to get if they go through the seller?

I’ll caveat this by saying I’ve done installment payments to buy a saddle with someone in the barn, and yes, the free interest was nice. She also knew me and we both knew it was a low risk situation for her.

I’d never ask the same of a stranger–I would always go through a bank if I felt the need to buy something else on payments (horse/saddle/whatever) because I don’t think the risk is fair to the seller otherwise. They are having to act as a bank with none of the rewards (interest) that a bank gets for assuming the risk.

I’m just curious about the other perspective on this.

[fordtraktor]

I don’t think it is sound financially to buy horses with loans. Or ski-doos or ATVs or any other recreational hobby. When I travel, I don’t go unless I can afford to pay it all off immediately either. I don’t finance things at all, other than our home, and we are paying that off as we can.

I don’t believe in financing recreation. Many people obviously do, but many people are also not very financially savvy and have leveraged themselves through credit card and other debt in a way that would make me very nervous. I grew up without a lot of money and I feel financially insecure with debt. I have seen too many people in very bad situations as the result of poor financial decisions and I have a lot of anxiety related to that.

Be careful about finances, it’s all fun until it is very much not.