Paying for an NFA machine gun

[Ingsoc75]

Now I understand that saving up to purchase something is always the best way but my question is this:

Is it possible to take out a personal loan to purchase a registered machine gun?

 

[gunner69]

If you can find a creditor that will do it yes. When I bought my first MP-40 I told my bank I needed the money for a vacation. No Problemo...... did I lie.....YUP. NOBODY needs to know that your load is to finance a weapon of any kind. Think about it......

 

[Telekinesis]

That's more of a question for a loan officer at your local bank than something we can answer here. Though if you can find a LO who will say yes, there's nothing else saying you can't use money from a loan to buy a machine gun. Expect to bring some documentation on the NFA itself and have a good explanation outlined of the process and legality of the weapon itself. Just remember that the LO likely won't know much about the NFA and will likely need some convincing to give you $20-80,000 for something that he thought was illegal 5 minutes before you walked in.

I personally don't take out debt to pay for things that are purely toys, but to each his own.

NOBODY needs to know that your load is to finance a weapon of any kind.

Be very careful about doing this. If your creditor finds out about this, it might lead to some legal trouble. You created the contract under false pretense after all...

 

[jmorris]

I personally don't take out debt to pay for things that are purely toys, but to each his own.

Yep, not only that you have a toy that isn't fun unless its chewing up and spitting out money.

 

[Prince Yamato]

You could probably just put it on layaway. Most dealers offer some sort of installment plan. The gun will sit at the dealers for 6 months while you wait for approval anyway.

In general though, I wouldn't purchase anything that I didn't have the immediate or near immediate cash for.

 

[AlexanderA]

There's no need to tell the bank you're going to use the loan to buy a machine gun, unless you hope to use it as collateral.

From the bank's point of view, a machine gun would make lousy collateral. For one thing, it would remain in the possession of the dealer for months until the ATF transfer approval was completed. Then, once it came into your possession, it would be impossible for the bank to repossess it without going through the same months-long transfer approval. And once they repossessed it, they would still have to sell it to get their money out of it. The point is that machine guns are "illiquid" from a financial standpoint. So the bank wouldn't touch this with a ten-foot pole.

The advice is good never to take on debt for an "optional" purchase like this.

A broader point is that this "illiquidity" is one of the things that really hurts the idea of "machine guns as an investment." (Besides the high unit cost.)

 

[fallout mike]

So what does the gun end up costing after all the interest you pay?

 

[wally]

I'm starting to think quality machine guns will appreciate much faster than our CDs at 1-2% do

The illiquidity is the main drawback, but I'd have some fun with it in the meantime

 

[Ingsoc75]

If I were to take out a personal loan for say a C&R weapon like an MP44/StG44, that would be more of an investment than a toy. Weapons like those are only going to appreciate in my opinion.

 

[paintballdude902]

ingsoc. fullautos as a whole will only gain value. there are no more being made that are full transferable. limited supply with growing demand.

 

[jmorris]

I'm starting to think quality machine guns will appreciate much faster than our CDs at 1-2% do

Unless they get banned, confiscated and destroyed, they could be. If that's too crazy to imagine, they would also drop like a rock if the registery was opened back up. Your $16,000 M16 would cost the same as a normal AR to build.

 

[wally]

they would also drop like a rock if the registery was opened back up. Your $16,000 M16 would cost the same as a normal AR to build

I'd be thrilled if that happened! if a $16,000 check to the NRA *would* do it, I'd be filling it out right now.

 

[Girodin]

The advice is good never to take on debt for an "optional" purchase like this.

I'm dubious that a machine gun is appreciating enough to make it profitable with the interest paid on the loan. Does anyone have a reasonable sense of how much F/A guns have appreciated in the last 5-10 years?

A broader point is that this "illiquidity" is one of the things that really hurts the idea of "machine guns as an investment."

I've been looking at buying a MAC and have noticed the same one has been for sale locally for a number of months, and at a pretty reasonable price as well (or so it seems to me from shopping around a bit).

 

[Zoogster]

A final point is that people can become prohibited persons. So they are even less desirable from a loan officer's point of view.
Some states also allow weapons to be seized from prohibited persons without compensation. Which would mean the bank gets nothing, the asset no longer is available.
Finally dealing with police in some places to get back seized weapons is a real pain. Now imagine a third party trying to get them from police if they are NFA items requiring such a transfer. Many police departments intentionally stall and cause trouble getting property back, and often have various policies that after X amount of time it belongs to them or gets 'destroyed' (and destroyed can mean both destroyed, or disposed of through sales, auctions etc) So they have financial motivation to make it as difficult and unlikely property will be reclaimed as possible.

Very few other items worth many thousands of dollars can just cease to be legal for someone to own based on completely unrelated events that have nothing to do with and don't involve the item in any manner.



If I was determining the value of such items to the bank after factoring in risk/reward I would value a machinegun or machinegun collection at far less than its actual NFA trading value because of all of this.
It can be seized, it has to be transferred through an extensive process that requires an employee being paid a salary to be involved in. It may require legal expense.
They are also dependent on politics to both remain legal, but also not have the registry reopen to keep the same value. Either of which changes the value of the asset and severely impacts the potential ability of the bank to recoup losses.

By contrast the bank can get their money or a good portion of it back from most other assets with much greater assurance far easier.

 

[Ian]

In the yast handful of years, machine guns did basically the same as the housing market. Prices climbed a lot in the early 2000s, and they dropped when the economy tanked. People just didn't have as much disposable income, and machine guns couldn't bring the same prices. Also, a lot more owners put guns on the market to pay bills. I bought my Vickers last year for 60% of what the previous owner paid in 2001. OTOH, the prices from 1985 to 2005 increased by 2000% or more.

So, I think this would be a pretty time to buy, but as with anything you need to take the time to find the right purchase if you are buying an investment. Something that's undervalued or underpriced. I got the Vickers because it is multi-caliber capable, it was a C&R gun, iconic, and cheap. Something like a Thompson is probably still too highly valued now to be a good investment.

Some of the better SMGs like Sterlings might be good buys, or odd variants of things like Madsen LMGs. All a matter of what you can find at what price. And of course, if the economy re-crashes again in a year or three you'll wish you had waited until then.

 

[243winxb]

M16a1

http://photobucket.com/M16A1

Does anyone have a reasonable sense of how much F/A guns have appreciated in the last 5-10 years?

Orginial Colt M16A1's have went from $15,000 to $21,000 in about 1 year. http://www.subguns.com/classifieds/?db=nfafirearms&category=All+Items+in+this+Category&query=category&search_and_display_db_button=on&results_format=headlines

 

[Bubbles]

Whatever happened to using MC or AmEx?

 

[medalguy]

Consider this too. You buy an expensive MG, take it to the range, have a kaboom, and blow the gun up with cheap milsurp ammo made in some God forsaken mountain village in Muslimastan, or otherwise damage it so the value drops to what a pile of scrap parts is worth. What then? And this does happen from time to time.

 

[1KPerDay]

I haven't seen SELLING prices of full-autos change for about 10 years, personally. They LIST them for more but I don't see many sell for the list price.

And, no, I wouldn't get a loan to buy one. If you're so strapped you need a loan to buy one, you won't be able to shoot it anyway.

My granny had a saying that I believe is wise: Dumb people pay interest. Smart people make interest.

 

[Flyincedar]

Did someone say something long the lines of the registry opening back up? That's gotta be the funniest thing I've heard in a while. No way that's happening. Ever. I'll glad eat my words and publicly apologize if it does.

 

[Ingsoc75]

Consider this too. You buy an expensive MG, take it to the range, have a kaboom, and blow the gun up with cheap milsurp ammo made in some God forsaken mountain village in Muslimastan, or otherwise damage it so the value drops to what a pile of scrap parts is worth. What then? And this does happen from time to time.

Good point.

 

[jmorris]

Did someone say something long the lines of the registry opening back up? That's gotta be the funniest thing I've heard in a while. No way that's happening. Ever. I'll glad eat my words and publicly apologize if it does.

That would be the opposite way to loose your investment from them being banned, confiscated and destroyed.

They are fun toys but not the best investment if you factor in the risk of something/anything going wrong.

 

[AlexanderA]

The high price of machine guns is due strictly to the artificial scarcity caused by the Hughes Amendment.

This kind of artificial scarcity is generally not a good basis for investment. The scarcity could be removed by legislation, or the items could be banned completely by legislation. Either way. your "investment" is entirely at the mercy of Congress. We've had the big runup in prices already, as people came to terms with the scarcity. Further runups are problematic. What's holding prices down now, besides the economy, is the red tape and illiquidity that goes along with ownership.

If I were to guess, I would say that the semiautomatic cousins of machine guns (such as the Ohio Ordnance M1918A3 BAR) would show better appreciation in the next few years than the machine guns themselves. Other selected collectible Title I guns would be a good bet, too. I was at a gun show this last weekend and was amazed at the asking prices (in thousands) for WWII GI-issue M1911's.

 

[essayons21]

If you can find a creditor that will do it yes. When I bought my first MP-40 I told my bank I needed the money for a vacation. No Problemo...... did I lie.....YUP. NOBODY needs to know that your load is to finance a weapon of any kind. Think about it......

That would be bank fraud, which carries a maximum penalty of 20 years in prison. If the money is transferred electronically, it is also wire fraud, which is another 20 years.

Not a very good thing to recommend on THR.

 

[AlexanderA]

Why would it be bank fraud? You are applying for a personal loan (no collateral) and what you do with the money is your business. Under these circumstances, your "collateral" is your signature and your good name. If the bank is going to extend you money on your signature, it obviously doesn't care what you do with the money -- go on vacation, buy a machine gun, or waste it on wine, women, and song. The only time the "use" is relevant is if you're applying for some kind of collateralized loan (that is, if the bank has doubts about your ability to repay). A straight signature loan doesn't need excessive disclosures. I think the bank would be more interested in your stream of income than what you do with the loan proceeds.