In the restoration of a vehicle, one should already have a good estimate of the costs of putting it back in to a roadworthy condition. Roadworthiness should mean the automobile is free from major defects and maintenance for at least two years. The basis in the cost for restoring a car should be determined using its current market value or going price in the market. From that the cost of restoration should only be twenty five percent (25%) of the market value or less. This makes the restoration more reasonable, and helps prevent having to take out a car loan.
Why twenty-five percent and not more? Take for granted the market value of the car is $10,000 but will not sell for as much because of defects. Normally, buyers will haggle for a price much lower than $7,500. Selling it for far less than that, and getting an auto loan will mean a larger loss compared to the twenty-five percent ($2,500) cost for restoration.
What should be considered in car restoration versus a new car loan?
– General condition of the car if it requires repairs or replacement of some mechanical and electrical parts; body repairs and repainting.
– What parts mentioned above will require the most in the restoration job?
– Can the restoration be done as a “Do-it-yourself” project, or will it need to be done by an auto repair shop?
When having a car restored in an auto repair shop, the cost of labor will be quite high; so it is best to be able to do the restoration at home. Ask friends or neighbors if they are willing to pitch in some help, or if they are knowledgeable or experienced in car restoration. The help they provide will not cost anything more than some snacks and drinks.
For some restorations, it might only involve mechanical parts or minor body repairs and repainting, and not a general car restoration issue. These restorations are easy to do on weekends or during a one week vacation leave. Consider using parts of a car that are purchased from junkyards, parts restoration shops, and surplus or used parts dealers that can further cut down costs.
Car owners should always bear in mind that taking out a new car loan will mean selling the car and paying mortgage with interest. Most of the time selling a car involves some loss from the going market price. If the calculated or estimated loss is much more than the cost for restoration, practically restoring the good old car is better than a car loan.