Bike Financing?

[drowe531]

http://www.ninjette.org/forums/showthread.php?t=50053

That had a lot of the info you are looking for I believe. I took my motorcycle loan on a 4 year term to give myself the lowest required payment but everyone month I was paying extra going straight to principle. Also loans/credit aren't the devil and sometimes are worth getting.

[kcaja1]

Why bother then? Opening and closing an account has a short to mid-term NEGATIVE impact on your credit report.

[Mr.E]

Yeah. I dont have the best credit because of school loans. And by not the best credit, I mean horrible credit. So it would help alot, if approved. And thanks. I should have looked for that link -_-

[Bosgarage57]

It depends on what year the bike is and how much you need/what its worth. You'll have to go through a bank (CREDIT UNION if you can) and see how long the term can be. Even if you plan on paying it off in 3 or 4 months, run it for a year or so and build your credit up. I know how school loans are

[greatwhiteninja]

if you plan on paying off by september it be best to save and buy one in sept.. especially with bad credit if you do get approved youll get a horrible interest rate probably. not the answer your looking for probably but.. as far as term really depends on the amount. say $4-5k for a new 250.. probably be 2yrs at like $100ish a month with a good APR.

[n4mwd]

Rather than getting a loan for a new bike, maybe shop around on Craig's List and find a good used one. A friend got his 2005 Ninja 250 in mint condition and low miles for $1000.

If you put a pile of money down on a new bike and pay a bunch of interest and fees, you will lose it all if you suddenly find yourself unable to make the payments. With the current economy, that is a very real threat.

[Bosgarage57]

Ed could be right, around here (TN) by sept people are starting to sell their bikes for winter, might be able to get a better price on one.

[Linuss]

Put me in the group of "financing ISN'T bad if done right" crowed.


I financed my Ninja. Put half down in cash, and financed the rest. I financed it over 4 years so that it's the lowest payment, thought it will be paid off much sooner.


My philosophy? I could pay it off this very minute, but I like having money in the bank in case of emergencies, and I have several months worth of expenses saved up for that. Plus, it helps your credit (not that mine needs it... at 22, my credit is much better than people twice my age)

[EsrTek]

Just got mine '11 250.. payments are about $175 /mo for 2.5 yrs @ 10.3%, w/ just $800 down on bike (paid the difference in loan max amount for bike, and the bottom end price the dealer would go).
I had harder time trying to get a loan for $2k on a used ninja 250, which they would only loan about 800-900 for, when most selling for 1500-2200 around here.

[greatwhiteninja]

i was lucky enough to be able to buy my 11 250 out right.. i considered financing but i hate payments..lol!

[Linuss]

Originally Posted by greatwhiteninja

i was lucky enough to be able to buy my 11 250 out right.. i considered financing but i hate payments..lol!

I hate owing money too, but I hate having no money in the bank more.

[whiteboy]

Originally Posted by kkim

I would never borrow money to buy a bike. If you don't have the cash in hand, can you really afford it?

Save the amount, then purchase the bike.

That makes no sense... Do u have a loan on a car? House? Rent? All a loan on a bike is... A loan just like on any other thing. That us all

[almost40]

Back from the dead almost a year from the day. LOL

PAY CASH .........if ya can.
No longer than 24 months on a loan.
Not more than 8% intrest.

If you cant afford $300 a month in your budget for the insurance and loan payment. You shouldnt be buying.
If you can afford $300 a month. BANK IT and buy a Used 2010 early next spring.

[almost40]

Originally Posted by kkim

I would never borrow money to buy a bike. If you don't have the cash in hand, can you really afford it?

Save the amount, then purchase the bike.

+1000000000000000000000000000
Sorry dude, but a motorcycle is a luxury item just like a boat or a jet ski.
If ya cant buy it with cash.......DO YA REALLY NEED IT?

This is the BEST advice..........

Were only talking $4000 HERE.
Thats less than 10 hours of your work week or 2 hours a day at $8.25 an hour. Put that $82.50 in a savings account every week. A year later .........POOF new ninjette. OWNED. If ya cant work that deal you will HAVE a like new ninjette with that money.

If you cant afford to do that. WHY ARE YOU CONSIDERING BORROWING MONEY???

[p4174w]

I suggest to the people that like throwing money into loans go through Dave Ramsey's Finincial Peace University. Your eyes will be opened

[Jesse8931]

My first bike I financed payed interest the whole 9 yards. since then I've never bought a bike I did not have cash and I've bought over 100 bikes, now of course there used and most were over 500 but I never owed anybody on them and could do what I want with them.

[p4174w]

I know this isn’t a great example since a car is much more money than a 250, but here is a little story for you all:

I am an accountant and my wife is a financial advisor. About a year ago, my sister in law was shopping for a new car. She had very little money (cash) to work with, around $3k. She was obsessed with buying a brand new car. Pretty much everyone she knows told her not to. She hardly ever drives, being a student, so an older car would have suited her just fine. We all thought we had her convinced, then one day she shows up with a brand new Maxima. According to her, it was okay because she got a 0% loan for 4 years. Free money, right? So she has this new car with a $400 monthly payment on a 4-5 year loan, I forget which. She could easily have spent her $3k for a used car and paid herself $3-$400 a month to save for a better car in a few years. Saving $300 a year would be $3600. That amount combined with what she could sell a $3k car for would get her a great used car in just a year or two. Then she could have just repeated that process and got an even better car, then again, and again, and so on. But….here we are, almost a year to the day. She just got an apartment downtown Chicago to be closer to school. And guess what? She is cancelling her insurance and storing the car since she will not need it during the school year. So now she has a car that she will be making monthly payments on while not using it, and she can’t sell the car for enough to repay the loan without losing a ton of money.

I’m not against buying new cars (or bikes). I just think you should have the funds to do it. I am however completely against debt. I have never carried any debt besides my house, which actually has a chance to make me money in the long run unlike a car loan.


fwiw…

[whiteboy]

I agree with all the talk about how if u can't afford it then don't buy it. But lol not every1 here is rich and loans are made for those non rich people. at some point every1 here will get a loan like it or not and lie if you don't. I myself can't afford a 100000 dollar house or a 4000 bike cash... But I can afford a 4500-5000 bike over 2 years. Y wait 2 years saving when I can get it now and up my credit. Credit now days is worth more.

[kkim]

Originally Posted by whiteboy

That makes no sense... Do u have a loan on a car? House? Rent? All a loan on a bike is... A loan just like on any other thing. That us all

that's the misconception most people have and the argument they use to justify digging themselves deeper and deeper into debt while giving in to impulse buying. gl w/ paying off your accumulated (financed) debt in the future. if you think I'm simply talking out of my pie hole, you're mistaken. It took me years of being a dumbass of buying on credit to finally realize the error of my ways. I don't give this advice lightly and neither should you trivialize it with your credit inexperience. Please realize, I fully understand why my statement makes no sense to you. Been there, done that.

... and to answer your question, I've bought every material good I own with cash in the last 10 years or so, except the house. One really needs to sit down and seriously analyze their life and distinguish between their wants and needs.

[Cuongism]

Only things I would get a loan on are investments such as a house, a business, or school education (and my future kids better get scholarships!).

Edit: add in a used car if you need a means of transport to work.

[RhinoJC]

On average you should be doing a major finance every two years, within reason. If you don't need to finance anything in the next six months or so, financing would be your best option.

Just keep in mind a motorcycle isn't a mode of transportation as far as lenders are concerned, it's a luxury item. If you don't have good credit, you likely aren't getting financed.

[ichibunkid.206]

Originally Posted by Mr.E

Yeah. I dont have the best credit because of school loans. And by not the best credit, I mean horrible credit. So it would help alot, if approved. And thanks. I should have looked for that link -_-

If your credit rating currently isn't... lets say great.... than you being able to get a loan maybe a moot point. The problem you'll have is if you do qualify for a loan, your interest rate will probably be pretty high... When I got my bike a month or so ago Kawasaki had finance through HSBC, rates were 3.9% for 24 months, if you don't pay the bike off in the 24 months then the remaining balance gets charged at what ever the current rate is in after 2 years.

If you are looking to use the motorcycle loan as a way to build, re-build your credit rating taking the loan out on the bike and paying it off in a short time.. say 6 months or less really won't help re-build your credit score a great deal.. don't get me wrong it'll help, but what the credit bureaus look at is your history... too really help you rebuild your credit rating... I won't say you "Need" but you'll have to show a history of paying your debit on time, and in full over a period of time... I maybe wrong, but I don't think a 6 month motorcycle loan will help all that much.

I won't tell you if you should or not... not for me to decide... only you can answer that

[drowe531]

Originally Posted by ichibunkid.206

If you are looking to use the motorcycle loan as a way to build, re-build your credit rating taking the loan out on the bike and paying it off in a short time.. say 6 months or less really won't help re-build your credit score a great deal.. don't get me wrong it'll help, but what the credit bureaus look at is your history

History is 1 of 5 things that make up a fico score. And while there is some information on how heavily things are weighed there is still some secrets and unknowns in the formula that affect the score.

[ichibunkid.206]

Originally Posted by drowe531

History is 1 of 5 things that make up a fico score. And while there is some information on how heavily things are weighed there is still some secrets and unknowns in the formula that affect the score.

Yeah you're right.. I should have said one of the things the Credit Bureaus look at was history.

[Jiggles]

Originally Posted by Mr.E

Yeah. I dont have the best credit because of school loans. And by not the best credit, I mean horrible credit. So it would help alot, if approved. And thanks. I should have looked for that link -_-

Student loans don't lower your credit score. If anything they help as this is good debt.

What is the oldest credit card account you have open?

Definitely go to a credit union as they will give you the best rates. However, even though my credit score is 731 they wouldn't give me a loan because my credit was too new. They told me to re apply in 3 months and most likely I would be approved. I was planning on paying off the bike before the end of the year anyway so I went with the HSBC kawasaki financing.
The Good: It added to my total credit limit which actually raised my credit score
I bought the bike 1.5 months ago and they still haven't requested payment (free bike???? )
The Bad: Crappy interest rate of 11.99% but since it will be payed off in a few months it's not that bad

[Mr.E]

Thanks for all the info guys lol. My credit score would be the major factor. The guy said if I had a co-signer then I might be alright, but the more I read this thread the more I question financing.

[Mr.E]

@Sean, That's pretty high interest rate. I assume if you have it with that good of a credit score my may be worse. But who knows. I think if I can convince my parents then maybe I can go and atleast see how my rates would be. I plan on doing it like you and paying it off completely soon. I'd only spend my checks on paying it off and insurance so it would be by september hopefully.


Edit: And if it makes any difference, once I get used to the bike it'd probably be my primary mode of transportation. My family used to have 3 cars, but one broke and they're working on getting another. But mean while, the bike would be mine. And probably will be everyday when it doesnt rain. lol.

[Xoulrath]

Originally Posted by p4174w

I suggest to the people that like throwing money into loans go through Dave Ramsey's Finincial Peace University. Your eyes will be opened

Dave Ramsey is an idiot. And the people who PAY HIM MONEY to do what anyone with half a brain could do if they would simply think logically are bigger idiots.

[EsrTek]

Originally Posted by Mr.E

I plan on doing it like you and paying it off completely soon. I'd only spend my checks on paying it off and insurance so it would be by september hopefully.

Plans like that seem like they will work out, but you may be forgetting other expenses that will come up. (Such as custom additions to bike etc etc).

Try to figure out what you might want to upgrade/change and it's price.
Average those to see about how much budget you would need to add 1 upgrade a month, into your cost of payment.. This way you'll either have the money for that upgrade or you got extra cash saved up for emergency (such as crash repairs etc).

e.g. - my payment is about 175, but I budget $275 out every month for an upgrade too (haven't saved sh*t yet).

Also I had/am repairing bad credit..talked to a few advisors, as I planned on paying my bike off in Feb. Now I will not be paying it off until the 1yr mark.. During that time frame I will try to double payment when I can. Reason is, I was told 1yr payment history is minimum people want when building/rebuilding credit. Getting a small (4k) loan and paying it off would be ignored and shunned off as a possible fluke (like maybe I hit a small lotto ticket, or got an inheritance of some kind), or something that I should have just bought w/ cash and will not help me get further credit.

[p4174w]

Originally Posted by Xoulrath

Dave Ramsey is an idiot. And the people who PAY HIM MONEY to do what anyone with half a brain could do if they would simply think logically are bigger idiots.

I wouldn’t exactly call him an idiot, but I do agree that much he says is just what people with common sense should do. The thing is, most of the population these days, especially people in their 20s-30s, do not possess common sense financially. Kinda like what kkim is saying above. A lot of young people make stupid mistakes with money and live on to later realize how dumb they were.

[Jiggles]

Originally Posted by Mr.E

@Sean, That's pretty high interest rate. I assume if you have it with that good of a credit score my may be worse. But who knows. I think if I can convince my parents then maybe I can go and atleast see how my rates would be. I plan on doing it like you and paying it off completely soon. I'd only spend my checks on paying it off and insurance so it would be by september hopefully.


Edit: And if it makes any difference, once I get used to the bike it'd probably be my primary mode of transportation. My family used to have 3 cars, but one broke and they're working on getting another. But mean while, the bike would be mine. And probably will be everyday when it doesnt rain. lol.

I sat down and calculated out how much extra it would cost me to go with the kawi credit option (which was my only option at the time). I figured out I could pay off the total amount in 6 months from the day I bought the bike. At that interest rate it would cost me an extra $300 to get the bike now as opposed to buying it outright once I saved the money. I decided the extra $300 was worth it .

Now the nice thing is that 1.5 months down the line they still haven't charged me any interest so the extra amount I will be paying will be less than $300.

Honestly, the kawi credit is not a very good idea unless your in a situation like me. If you need a longer termed loan like 2-3-4years then the kawi credit will bury you in a hole. This option works for me under my circumstances. You need to seriously look at your financial situation and decide what is right for you and how much extra $$$ you are willing to pay to have your bike now.

Good Luck

[drowe531]

Originally Posted by p4174w

I wouldn’t exactly call him an idiot, but I do agree that much he says is just what people with common sense should do. The thing is, most of the population these days, especially people in their 20s-30s, do not possess common sense financially. Kinda like what kkim is saying above. A lot of young people make stupid mistakes with money and live on to later realize how dumb they were.

Generalizing younger people, we aren't all in this category. Actually for my age (24) I probably know more about credit scores then a good majority of people. However I do agree that there are a lot of people young and old that don't understand basic finance and credit at all. I'm very much for teaching some basic finance at the high school level.

[kkim]

he never said all younger people... he said most/ a lot.

[p4174w]

Originally Posted by drowe531

Generalizing younger people, we aren't all in this category. Actually for my age (24) I probably know more about credit scores then a good majority of people. However I do agree that there are a lot of people young and old that don't understand basic finance and credit at all. I'm very much for teaching some basic finance at the high school level.

You are totally correct on all counts. We aren't all in this category. I'm 25

The school system definitely needs to pick it up in the finance department

Originally Posted by kkim

he never said all younger people... he said most/ a lot.

Mahalo

[Linuss]

I'm 22 years old. My credit, last I checked, was 740ish. My oldest credit card goes back to when I was 18, and my car (which I paid off in Jan) went back to 2006.


My APR with Kawi was still 11.99%, but honestly, on $3500, it's not that bad.


My payments are $75 a month. Like I said... I'd rather have a small payment then spend on my money and have an emergency pop up. I justify the $75/mo (I pay more than that) because it actually saves me almost $140 in gas if I take only my bike to work instead of my car.

[Jiggles]

Originally Posted by Linuss

I'm 22 years old. My credit, last I checked, was 740ish. My oldest credit card goes back to when I was 18, and my car (which I paid off in Jan) went back to 2006.


My APR with Kawi was still 11.99%, but honestly, on $3500, it's not that bad.


My payments are $75 a month. Like I said... I'd rather have a small payment then spend on my money and have an emergency pop up. I justify the $75/mo (I pay more than that) because it actually saves me almost $140 in gas if I take only my bike to work instead of my car.

You should have been able to get a loan with a better interest rate. I'm 20 with a 2yr old credit card and the credit union said they could offer me a loan in September.

After 2 years your interest rate doubles, I hope you pay off the bike before then

[Linuss]

Bike will be paid off before the end of the year.


Yes, I could have gotten a lower rate, but it was done through Kawi, and in-house financing is known to be higher. I didn't care about shopping around as again, only $3000 financed, and I'm lazy.

[TXJ]

Financing is a double edge. If you're responsible and can manage your money then go for it.

Responsibility and making a plan is key. I've know people who financed a bike, car what have you, then traded it in and rolled over their loan a year later. So then their new (example) $3000 bike is now a $4000 bike because of the loan rollover. Even if you expect to pay it off in a few months, think and plan to pay it monthly for the life of the loan. Life isn't predictable and what you have saved now may be needed two days after you get a loan.

Ask yourself questions before going into it: Am I going to keep the bike for the life of the loan? How many miles will it have at the end of the loan? If it breaks down and I'm making payments still, can I afford it? Can I afford maintenance while making payment? etc.etc..

A lot of people I know have everything, down to their furniture on payments. They always say "only X more years and I can save money" blah blah.

Getting a auto loan isn't a bad thing, but when you get into the "I can afford it, it's only $XXX a month" frame of mind and start financing more stuff is when you're in trouble.

[Alex]

Originally Posted by drowe531

Generalizing younger people, we aren't all in this category. Actually for my age (24) I probably know more about credit scores then a good majority of people. However I do agree that there are a lot of people young and old that don't understand basic finance and credit at all. I'm very much for teaching some basic finance at the high school level.

The next lesson is then that after a certain point, credit scores don't mean squat. The public emphasis on them is drawn out by the finance industry to encourage people to care so much about their credit score to actually spend additional money on credit to inflate an otherwise meaningless number.

In other words, for someone who earns a reasonable income, pays any debts on time, and manages their finances halfway intelligently, their credit score will be a-ok without them thinking a whit about it. Spending any extra money with the justification "I could pay less, but this will help my credit score", is someone who still hasn't figured things out.

[n4mwd]

Sorry guys, I totally screwed up. There was another thread by the same name and I meant to post to it. Instead, I posted to this one by mistake and have resurrected a year old thread. Sorry about that.

Anyway, I agree its better to save your money and buy what you can afford. Even houses. If folks about 6 or 7 years ago had saved their money for a house, instead of jumping at the easy credit and adjustable mortgages that were available back then, we wouldn't be in the real estate mess we are in right now.

Back then, people bought houses worth $150K but paid $450K on a mortgage that they will likely end up paying over $1.5M over the life of the loan. People who started saving back then are now buying foreclosed homes at a substantial discount. People who bought on a mortgage back then who haven't defaulted, are upside down right now and owe $300K more than their house is worth. Now they are stuck and can't sell or move.

The bottom line is that you will never regret staying out of debt.