Bike Financing?

[midknight]

Ok guys, I'm about ready to sign up for the MSF class so that means that I will also begin looking at bikes. So anyway, I've go a question for those who did not have the $4,000 to $5,000 laying around to drop on a bike. I will probably end up financing through a local credit union and was wondering what most of you set your term for (2 years, 4 years, or whatever). Just wanting to know what I should be looking at...anyway, please don't think I'm an idiot for asking this question I just want to get as much info from some average Joe's like myself (or Jane's) before the bank or Kawi tries to stiff me for a lot of cash.

[wvninja]

i have mine thro justice federal credit union .. around 7% interest with $1k down monthly payments are roughly $160 a month for 12 months

[drowe531]

I think the biggest factor is what you can afford as a monthly payment. I set mine for 4 years through my local credit union with 0 down because I prefered the lower monthly payment. I do also have an older gen 04 I bought for cash that broke that I need to repair and sell to put against the loan. Another thing to think about is if you do 3 or 4 years and decide to sell before hand you need to find a buyer, pay off the rest of the loan to get the title before you can transfer it over.

So i guess what I'm saying is it depends if you want a lower monthly payment or want to own it outright quicker.

[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.

[wvninja]

Why not take a loan? I see nothing wrong with it. Just because I don't want to go out and drop $5k on a bike doesn't mean I dont have the amount to do so. Sure i could have saved 4 months and owned it outright but why not just make payments. Life = debt in some way shape or form you will always be in debt to someone. If your not then hey.. give me some money your obviously growing it on trees.

[GeneJunkie]

I just got the Kawi Good Times card. 4.99% financing for 24 months and then it goes up to 15.99%. I put down about a third of the purchase price, and I'm paying minimums for now at $46/mo.

BTW this is the only loan I have, I don't have student loans, car loan, credit cards etc etc. I needed a way to get to school asap which is why I took out the loan. I did have cash to pay for the bike but I like to keep something in my savings just in case.

[drowe531]

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.

I could have bought it outright but I got the loan to improve my credit score by diversifying the type of credit I have plus extending my history of payments.

[midknight]

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.

Well that's where we are different then. I see it more manageable for me to take a loan instead of saving for however long it would take me to scrounge up the cash, but that's why I am asking and I thank you for your opinion.

Taking a loan would be the more realistic thing for me - i've not exactly got the kind of job that lands a couple thousand dollars a pay check but yes even if I don't have cash in hand I really can afford it.

[bob706]

Just try and get a loan with the best interest rate and pay that thing off as soon as you can, no more than two years.

[kamikaze]

i was going to go with the kawi 1.9% over 360 months, but apparently they tack on a bunch of extra fees, so the dealer advised me to go with a bank @ 7.9% over 60 to get the minimum payment down, but it's open so I plan to pay more than the minimum every month, and if I get tight for whatever reason, I can fall back to the lower payments.

[FrugalNinja250]

Get as short a loan term as you can afford, otherwise you'll wind up paying nearly as much for interest as the bike itself cost. Nothing sucks worse than paying $7,000 for a $4,500 bike that will be worth $3,000 or less by the time a long term note ends.

Another consideration: With a note you'll have to carry full coverage insurance for theft and collision (your fault). The insurance co will not pay off the loan balance, only the value (used) of the bike itself. With a long term and/or high interest loan the amount owed will be more than the insurance value, leaving you still making payments on a bike that's gone (totaled or stolen).

It's foolish to get into that position.

If you can't pay cash, the next best thing is to save up as much as you can for a large down payment so that at least you won't be upside down on the bike. And, if you can save $3k up there's a good chance you can find a low mileage used bike in good condition and pay cash, leaving you debt free with money from future income to do routine maintenance and purchase gear with.

As a new rider it's much more likely that you'll total the bike, too. It doesn't take much to total one, BTW, just trash the plastics and tank and a few other parts.

[revstriker]

I tend to agree with kkim. For most people, a bike is not their daily mode of transportation, its more of a toy.

That said, if you are going to finance it, I think FrugalNinja250 was spot on with his advice. Get the shortest term you can, with the largest down payment you can afford. When you're only talking about a few thousand financed, interest rate really isn't that big of a deal.

If you are a new rider getting his first bike, I would also recommend picking up something used and cheap and avoid financing. That way, you can learn without fear of messing up a bike you still owe lots of money on. And if you get tired of the bike a year or two down the road, you can always sell it (and probably get close to what you paid for it) and move on to something bigger without worrying about losing your shirt in depreciation.

[tjkamper]

Originally Posted by kamikaze

i was going to go with the kawi 1.9% over 360 months, but apparently they tack on a bunch of extra fees, so the dealer advised me to go with a bank @ 7.9% over 60 to get the minimum payment down, but it's open so I plan to pay more than the minimum every month, and if I get tight for whatever reason, I can fall back to the lower payments.

360 Months!!!! Thats a freak'n 30 year mortgage on your bike. I bet you ment 36.

I recommend paying it off as fast as you can if you do finance it. Make an extra payment or two a year and save some money on interest.

[midknight]

thanks for all the advice everyone! Looks like I'm gonna save for a bit before I get a bike. My father-in-law has an older suzuki 125 dual sport I can probably practice on until I save the money up. Thanks again for the suggestions....I love this forum you guys (and gals) know your stuff!

[Reswob]

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.

With the prices of todays bikes (10g for a 600), I bet almost no one pays up front. Just because you don't have that kind of dough to drop all at once doesn't mean you can't afford it - that's what financing is for. No one pays cash for a new car, a bike isn't all that different.

The only reason I would be hesitant to finance though, is most of time with a lien on the title, you will have to have full coverage insurance, which may cost enough to truly make financing unaffordable.

[kkim]

Originally Posted by Reswob

No one pays cash for a new car, a bike isn't all that different.

I wouldn't say "no one".

I haven't taken out a loan on the last few new cars I've purchased. Certainly, I've paid cash for all of my bikes. And I do have a money tree... it's called a good job and a savings account. It took me a lifetime to learn that lesson, but learn it I did. I'm trying to pass on what I've learned to those that would care to listen.

Just because you can't imagine/realize it, doesn't make it unobtainable.

Britton- good decision. I wish you the best in your quest to own a bike in the future... plus, I love dual sport bikes as well and you may discover a whole new world of motorcycling to enjoy.

[Reswob]

Originally Posted by kkim

I wouldn't say "no one".

I haven't taken out a loan on the last few new cars I've purchased. Certainly, I've paid cash for all of my bikes. And I do have a money tree... it's called a good job and a savings account. It took me a lifetime to learn that lesson, but learn it I did. I'm trying to pass on what I've learned to those that would care to listen.

Just because you can't imagine/realize it, doesn't make it unobtainable.

Britton- good decision. I wish you the best in your quest to own a bike in the future... plus, I love dual sport bikes as well and you may discover a whole new world of motorcycling to enjoy.

Ok, no one except rich people (and before you argue, if you bought your 'last few new cars' outright, then yes, you have a lot more money in your savings account then the rest of us middle- or lower-class losers).

Most who have a good job and a savings account simply don't have the kind of extra money in it to just go out and buy a new bike/car/house. You sound like you think financing is for the financially unwise, when in fact, it's the only way most of us regular joe's can afford to buy anything that expensive. Having a good job only makes you sure that you can pay the monthly bills on your loans.

[kkim]

Yep, I was born with a silver spoon in my mouth and mom and dad gave me buckets of money whenever I cried for it. If you believe that... you, sir, know nothing about me or my past.

If you are living/surviving month to month to barely pay the bills, you really need to look into gaining some financial stability in your life. The problem with most people is that they spend what they make and beyond, when they should be saving it instead.

[Reswob]

Originally Posted by kkim

Yep, I was born with a silver spoon in my mouth and mom and dad gave me buckets of money whenever I cried for it. If you believe that... you, sir, know nothing about me or my past.

If you are living/surviving month to month to barely pay the bills, you really need to look into gaining some financial stability in your life. The problem with most people is that they spend what they make and beyond, when they should be saving it instead.

There is a massive difference between 'barely paying the bills' and having to finance a new vehicle b/c you don't have an extra 10, 20, 30 grand in the bank.

[adri99an]

This is entertaining and I am learning so many life lessons here fellas--thanx

[midknight]

Guys, look, sorry to cause an argument over ninjette members. I just wanted to ask some questions and get some advice. I didn't want (and wasn't looking to) start an argument. There are more people more fortunate than others and there are people that understand how to save and those who don't. I'm not saying that anybody on this forum fits into either category...that's not for me to judge. I'm still pretty young (26) and I know in time I will be more financially stable. c'mon ninjette people aren't suppose to argue...isn't there some kind of unwritten code or something?

[kamikaze]

Originally Posted by tjkamper

360 Months!!!! Thats a freak'n 30 year mortgage on your bike. I bet you ment 36.

I recommend paying it off as fast as you can if you do finance it. Make an extra payment or two a year and save some money on interest.

lol yea. must have missed that when I proofread

the kawi financing looked good on paper until you added all the fees. I usually get a pretty good tax return too, so when that time comes I'll put a chunk of change down on it too.

[kkim]

no argument here, just explaining my point of view.

adrian... go change your tire.

[adri99an]

Hahhahahaaaa- do you recommend a good tire? Should I save up for it or take out a loan? Lol

Btw- you both have solid points--like you I saved up to buy my bike but in my younger years I financed all my vehicles- builds credit and easier to pay off.
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[revstriker]

Originally Posted by Reswob

There is a massive difference between 'barely paying the bills' and having to finance a new vehicle b/c you don't have an extra 10, 20, 30 grand in the bank.

Just to add my $.02: I think there is a difference between financing an automobile because you don't have the money to buy it out right, and doing the same for a bike which is not your main means of transportation. One may be a necessity while the other is a luxury. But this just comes down to how people manage their finances. As long as you're not over your head with payments, then its all a matter of opinion.

[Cedilla]

I financed my bike with Sheffield financial 60mo at 6% interest. 0 down. A year later I am regretting my choice. I walked into the stealership with nearly 4 grand in my pocket that I had been saving for months. I ended up financing the whole bike, and blew the money on god knows what, and now I still owe $4200 on a bike thats worth maybe 3k on a good day. It does not seem like much money, but I work part time making $9 an hour, so its a pretty big deal to me. So now I badly need a new car, but I really don't want to take out another loan, when I have 4 yrs left on the kawi loan.

I would say listen to kkim, he knows what he is talking about.

To all of the people that are saying you need to be rich to pay cash for a new car. I know somebody that paid cash for their house at the age of 24 while working a low paying retail job.

[dubojr1]

Originally Posted by kkim

If you are living/surviving month to month to barely pay the bills, you really need to look into gaining some financial stability in your life. The problem with most people is that they spend what they make and beyond, when they should be saving it instead.

[revstriker]

Originally Posted by Cedilla

I financed my bike with Sheffield financial 60mo at 6% interest. 0 down. A year later I am regretting my choice. I walked into the stealership with nearly 4 grand in my pocket that I had been saving for months. I ended up financing the whole bike, and blew the money on god knows what, and now I still owe $4200 on a bike thats worth maybe 3k on a good day. It does not seem like much money, but I work part time making $9 an hour, so its a pretty big deal to me. So now I badly need a new car, but I really don't want to take out another loan, when I have 4 yrs left on the kawi loan.

I would say listen to kkim, he knows what he is talking about.

To all of the people that are saying you need to be rich to pay cash for a new car. I know somebody that paid cash for their house at the age of 24 while working a low paying retail job.

Wow. This is good example of getting in over your head. It probably seemed like a good deal at first because you could swing the payments, and you would have that cash to spend on other things. But you didn't realize the size of the hole you were digging. Of course, that's how they sell this stuff too. The good news is, with a little planning and dedication, you can improve your situation. You can cut a year off of your loan by adding $20 to each payment (Assuming a loan for $4,500 at 6% over 60 months). Up that amount to $50 and you would cut 2 years off of the loan.

As you have pointed out, you don't have to be rich to save money (you had said you had saved $4200 prior to buying your bike). What it comes down to is one's patience to save for something they want instead of using credit to get it right away.

[drowe531]

I'll chime in again on my situation. I do agree with kkim that just the amount you pay in interest makes a 4k vehicle cost you 7k. Same thing with a mortgage. My undergrad degree was finance and my masters right now is currently finance concentration. I've also worked as a non profit debt counselor so I know what debt can do to some people. Saying all that though its not always the worse thing in life if used correctly and within reason. Something alot of people seem to miss out on is every dollar extra you pay over the minimum payment goes directly to principle. Right now my minimum payment is 71 but I pay 100 per month and should have the 4 year loan payed off in around 2. This is also if I don't get my old bike fixed and sold. A small loan on a ninja 250 can be good for help building a credit history at a young age like I am right now. These payments are easily affordable to me but it all comes down to budgeting.

I do enjoy having my shiny things though from saving up as well. This year I've bought a 52inch, 40 and 32 inch LCD tv's.

[Blackwidow]

Originally Posted by FrugalNinja250

Another consideration: With a note you'll have to carry full coverage insurance for theft and collision (your fault). The insurance co will not pay off the loan balance, only the value (used) of the bike itself. With a long term and/or high interest loan the amount owed will be more than the insurance value, leaving you still making payments on a bike that's gone (totaled or stolen).

.

Ohhh very nice advice! Do you happen to have uninsured motorist insurance too? I was told its good to have, i just don't see why i have to pay extra for irresponsible people. If the person is uninsured, I can sue them for damages...right?

[Blackwidow]

Originally Posted by midknight

Guys, look, sorry to cause an argument over ninjette members. I just wanted to ask some questions and get some advice. I didn't want (and wasn't looking to) start an argument. There are more people more fortunate than others and there are people that understand how to save and those who don't. I'm not saying that anybody on this forum fits into either category...that's not for me to judge. I'm still pretty young (26) and I know in time I will be more financially stable. c'mon ninjette people aren't suppose to argue...isn't there some kind of unwritten code or something?

its really up to you and your lifestyle. I personally took out a new loan for a car i just bought cuz I messed up my credit in my younger years and now that i'm much more responsible, i took the loan to help my credit. If i didn't have that loan, i would have financed the bike, but you always want to send more then the minimum, it just helps you out in the end. I'm just waiting for my bonus check to get my bike and pay it in full. But that just me cuz i have the comfort of knowing that i have a big check coming in. Otherwise, I would have just financed too. any way you do it, is fine...just be responsible with it. Good luck!

[Alex]

Originally Posted by Blackwidow

i just don't see why i have to pay extra for irresponsible people. If the person is uninsured, I can sue them for damages...right?

Don't think of it as paying for them, think of it as covering yourself. If they are uninsured, what is the likelihood of any meaningful collection if you do find yourself suing them? That said, if you have decent quality medical insurance that will cover you no matter what, perhaps uninsured/underinsured coverage might not be cost-effective. But typically that coverage will include loss of pay while you're out of work, while medical coverage doesn't.

[Blackwidow]

Originally Posted by Alex

Don't think of it as paying for them, think of it as covering yourself. If they are uninsured, what is the likelihood of any meaningful collection if you do find yourself suing them? That said, if you have decent quality medical insurance that will cover you no matter what, perhaps uninsured/underinsured coverage might not be cost-effective. But typically that coverage will include loss of pay while you're out of work, while medical coverage doesn't.

Its such difficult decision. Being a brand spanking new rider, my insurance is crazy high...i got a quote from #$^&$#!@ and they quoted me at $1000 for 6 months!!! thats 2g's a year!! Am I getting ripped off?

[Alex]

Sounds quite high, definitely shop around.

[GeneJunkie]

Originally Posted by Reswob

Ok, no one except rich people (and before you argue, if you bought your 'last few new cars' outright, then yes, you have a lot more money in your savings account then the rest of us middle- or lower-class losers).

Most who have a good job and a savings account simply don't have the kind of extra money in it to just go out and buy a new bike/car/house. You sound like you think financing is for the financially unwise, when in fact, it's the only way most of us regular joe's can afford to buy anything that expensive. Having a good job only makes you sure that you can pay the monthly bills on your loans.

First off I have bought all of my cars outright in cash. My first car was a family hand me down car... 1992 Subaru Legacy for $2000 when I was in high school, my second car was used 1999 Honda Accord EX that I bought when I was in college and then my latest car 2006 Honda CRV LX (base model) was bought brand new. The first two cars I bought when I was working minimum wage jobs and my most recent car I was only able to buy because I was working two jobs. My parents do have money but they they refuse to help with big purchases. They have tried their best to make sure that my sister and I are not dependent on them and we take financial responsibility for our lives.

It is all about budgeting your finances, I always had a percentage of my paychecks go into savings and when I was working 2 jobs, the 2nd job pay strictly went into savings. Unfortunately the American way of life is to put everything on credit and live life constantly paying off debt.

Originally Posted by FrugalNinja250

Another consideration: With a note you'll have to carry full coverage insurance for theft and collision (your fault). The insurance co will not pay off the loan balance, only the value (used) of the bike itself. With a long term and/or high interest loan the amount owed will be more than the insurance value, leaving you still making payments on a bike that's gone (totaled or stolen).

Kawi financing doesn't require proof of insurance.

[drowe531]

Originally Posted by Blackwidow

Its such difficult decision. Being a brand spanking new rider, my insurance is crazy high...i got a quote from #$^&$#!@ and they quoted me at $1000 for 6 months!!! thats 2g's a year!! Am I getting ripped off?

I would def look around. I was 22 new rider full coverage was around 300 for the year maybe a bit less.

[dubojr1]

Originally Posted by Blackwidow

Its such difficult decision. Being a brand spanking new rider, my insurance is crazy high...i got a quote from #$^&$#!@ and they quoted me at $1000 for 6 months!!! thats 2g's a year!! Am I getting ripped off?

Keep shopping around. My statefarm insurance is less than $18 per month for full coverage and uninsured motorist coverage. $500 deductible with 25/50/50 coverage.

[FrugalNinja250]

Originally Posted by Blackwidow

Ohhh very nice advice! Do you happen to have uninsured motorist insurance too? I was told its good to have, i just don't see why i have to pay extra for irresponsible people. If the person is uninsured, I can sue them for damages...right?

Availability of different types of coverage vary by state and company. For instance, the only way my insurance company will sell me medical or underinsured/uninsured coverage is if I buy a full coverage policy with them, which is fairly expensive.

Yes, you can sue the other party for damages, but if they don't have anything of value such as assets or bank accounts that you can attach (remember what OJ did to his millions?) then you might as well be suing a pot of air. Those kind of people are referred to in the trade as "judgment-proof". Remember, when you sue someone who has no reasonable chance of coming up with the money to satisfy a judgment your lawyer is going to ask you to pay him up front, in cash.

[revstriker]

Originally Posted by Alex

Don't think of it as paying for them, think of it as covering yourself. If they are uninsured, what is the likelihood of any meaningful collection if you do find yourself suing them? That said, if you have decent quality medical insurance that will cover you no matter what, perhaps uninsured/underinsured coverage might not be cost-effective. But typically that coverage will include loss of pay while you're out of work, while medical coverage doesn't.

Very good point. Especially if you live in an area like I do where a good percent of the drivers on the road are not even in the country legally.

[Mr.E]

Hey guys.
I know I shouldn't and what not, but I'm thinking about getting a loan to get a bike. I know I'll be able to have it paid off by september and... well.. I got the fever. Lol. But I was wondering how does financing work for motorcycles year wise. You know how on a car you can select to pay off the loan within 2, 4, ect years, is it the same with motorcycles? I dont plan on going anywhere near even a year or 6 months. I plan on having it paid off in about a few months. I was just wondering. Thanks!