Paying for your racing.

I start out by buying the car.  I used to have a flat rule of never starting out spending more than $300 but in the last few years I’ve moved it up to $500.  

Then I work on the car and save my money until I can buy an engine. Etc. $500 limit still 

in other words I self finance it.  The main restriction is always money. 

I’ve known people who buy whole complete cars. Savings? Loan?  Bonus?  Selling Grandma’s heirloom? 

A few brave souls have been known to race their daily driver.  Not sure how that works if you are making payments. 

One way I would never suggest is a friend got a home equity loan because the interest was low. Then 2008 happened and suddenly he was upside down on his mortgage, no job and a lousy job market. Long story short he lost his home and still had a race car now worth little. 

So what method do you use? 

Never actually owned a true race car, until my son got interested in drag racing.  Until then I would run what I brung.  As far as financing our joint (son and myself) adventures, it was always self financing.  Generally with me having the bulk of said $.  

I've always firmly believed that you should never take something on the track that you can't walk away from financially. It blows my mind that people are willing to track expensive cars that they have leased or are still making payments on. (I'm ok with the idea if they purchased track insurance.)

Admittedly, I spend more money than I'd like on racing but it's mostly on safety equipment, maintenance, and entry + license fees. Once I get all that taken care of I move on to upgrades. I try to only use money I make from fixing up cars, but if I need a little extra cash for a big purchase it's always extra savings in the bank that's not part of our emergency fund. Wouldn't feel comfortable doing it any other way. 

The only real race I've owned I bought it dirt cheap and spent two years going through every part.  It was purchased with cash, as was everything else for the car.

Fortunately I had access to a lot of the right people at the time.  At that point I crewed for a professional Nascar team and the guys that built our cars painted it for next to nothing using left over paint.  It looked great when it was done. They even built amazing looking aluminum panels for the interior.   The guy that bought it from me still has it 12 years later and it still looks perfect.  But yes, i would only pay cash for a race car.  You never know which corner will be its last.

enginenerd said:

I've always firmly believed that you should never take something on the track that you can't walk away from financially.

Right on the money. No pun intended.

I have self funded my motorcycle racing for over 20 years. I have some rules before going racing and for the race effort also. These rules have allowed me to race for 20 years and still pay off my mortgage early.

1) All bills get paid first, this is non racing bills, mortgage, utilities, insurance, you name it it gets paid, even credit cards get paid in full before a race weekend. I pay them off every month, but don't let them sit till after a race weekend if I have them before.

2) Savings are funded for emergencies, racing is dangerous, you can break your clavicle, not one, but both to even it out (10 years apart). I also put away cash for retirement.

3) I don't buy stuff I don't need. I am closing in on 50, and have only had one new car, it was the most expensive car I have paid for, a 98 neon ACR (never made it to the track). I drove it for 250,000 miles. I paid cash, $12.700. I saved for a long time to get there. My next car was a 2.5 year old CRV, the only reason the neon went and the CRV arrived was that at the time was the CRV, at 12K was a steal, used value was 18K. Cash again, I will drive it until it at least hits 150K, then again, if it is still working I will keep driving it, it might make 250 like the neon. The only car payment I ever had was back in 1989 (used 87 Dodge Daytona) when I was getting sucked dry by college tuition.

Racing rules

Don't buy stuff you don't need with your race budget. My bike, a 2000 SV 650, bought as salvage in 2001 still has the original chain and sprockets. Most change the chain and sprockets to a 520 from a 525 right away.  The bike came from Suzuki with the correct gearing for Loudon, so why change it, for maybe 3/10 of a second?. Spend the money on track time ,the bike is still faster than I am as it is.  When the chain and sprockets wear out, I will replace them with a 520. For the first 2 or three years, I ran the stock exhaust and a set of clubman handle bars (35 bucks vs 150 for clip ons). Money was tight then, and what funds I had were used on the things necessary for the track. Spending money stuff you don't need, then not having money for track time sucks. Ask my friend, just cant get him to understand, but he does it all the time.Maintenance also comes before cool stuff/paint/performance upgrades.

Race what you can afford, I run the light weight class, tires are cheaper and last longer. The lightweight class is faster than the middle weight classes were when I started racing in the early 90s. Racing light weight allows me to race more.

I camp at the track and bring most of my meals, that saves a lot of cash, 200+ for a couple nights lodging, (non leaf peeper weekends in NH) plus meals. That will cover an all day Thursday test and tune, the gas used on the track and to and from the track.

Don't buy exotic fuel if you don't need it. Suzuki say 87 octane (maybe 89) and my motor is stock, so I use 93 pump gas, splurging here. My friend likes running the expensive stuff in the 5 gallon cans at the track, another waste of cash as his engine is stock also.

PS: Not having kids does helped also. Not sure how people with kids do it.

Just a few thoughts, could keep rambling, with more gammer mistakes, but I think you all get my points. If you don't bills to live first, savings, don't spend what you don't need to, in life and racing.

PPS: If some one wants to fund my racing I am open to it.

enginenerd said:

I've always firmly believed that you should never take something on the track that you can't walk away from financially. It blows my mind that people are willing to track expensive cars that they have leased or are still making payments on. (I'm ok with the idea if they purchased track insurance.)

Admittedly, I spend more money than I'd like on racing but it's mostly on safety equipment, maintenance, and entry + license fees. Once I get all that taken care of I move on to upgrades. I try to only use money I make from fixing up cars, but if I need a little extra cash for a big purchase it's always extra savings in the bank that's not part of our emergency fund. Wouldn't feel comfortable doing it any other way. 

I always agreed with that part. That’s why I used to put a limit of $300 and eventually raised it to $500 

In reply to lrrs :

i don’t know motorcycle racing  but I do know I managed to race in the big thunder boomer class on a budget smaller than almost anyone including the small engine classes.  

There are likely more ways to save on bigger classes than on smaller classes

I'm not sure what type of racing you are doing with $500 cars. I chose to race in what is arguably the most affordable spec class out there, Spec E30. Built the car myself except for the roll cage welding. Used seat, steering wheel, wheels. I barely got it on track for under $10,000. Upside is that after building maintenance was only oil changes, tires and brake pads. Rock solid car to race.

That 10 grand sitting on a trailer gnawed at me though. One of my racing friends had his car totaled by another incompetent driver. He was lucky to clear around $5000 for the leftovers. Gave up W2W racing.

I recently sold my E30 for what I had in it and count myself extremely fortunate. Going to time trial instead where the risk factor is less. Still, I will probably wind up with $7-8k in a TT E36 M3.

If you just want to do HPDEs a couple thousand bucks in a Miata will get the job done and put a big smile on your face.

How do I pay for it? I have a play money account. If a do side work or sell stuff I keep that cash in there. Wife doesn't complain about it, doesn't want to know about it. Never, ever borrow to go play.

Play money account.  Interesting idea makes more sense than race car budget which is what I called my account( uninspiring wasn’t it?) 

As for risk, I completely understand.  At one time during the peak of Vintage racing I was offered silly money for my car which wound up being $200,000 more than it sold for at the peak of the recession.  

So should I morn the loss of $200,000 or appreciate the fun and joy I had racing it?  

I’ve raced with cars that have sold for something like 30 million( two of them are on my photo)  none of us actually risked that.  All we risked is what it would take to restore it back to as raced condition. Maybe a couple of hundred thousand at most.  In my case a lot less since I did all the work myself on a budget that makes your BMW budget look extravagant.  

Yes that car was originally purchased for $300.  

In reply to lrrs :

Camping at the track was the norm for me although when I raced in the Bahamas for speed week  with our entry fee we got a big suite at one of the POSH hotels on the Beach. 

Gotta tell you how much fun it was to fire up the race car with the unmuffled megaphone exhaust at 6:00 in the Morning to drive it to the race track.