Topic: Motorcycle financing...

[GroovieGhoulie]

What's the best way to finance a motorcycle?  Go through the dealer?  A bank?

I've never bought a new bike, but I just bought the fiancee a four-wheeler because she wanted one.  I looked at financing, (at the dealership anyway), and the interest rates are INSANE for bikes and four-wheelers, so I just wrote a check and bought it outright.

Question comes though, WHY is it so high?  I bought my car at a 3% interest rate via my credit union, but bikes seem to start at 10% and go up from there.

[Gordon]

You'll almost always get a better deal going through your credit union.  When I bought my '96 Subaru I couldn't get a standard auto loan from my credit union because it had too many miles on it, so I just got a signature loan and it was still a better interest rate than most dealers would offer. 

[edbikerii]

GG, even better tip for when you buy YOUR new bike:  Get a credit card that gives "cash back".  Mine gives 2% cash back on purchases.   There is a $20 annual fee, but I call every year (if I remember) and get it refunded.

Then, work out the whole deal with your salesman, but don't talk about financing until the end.  Then, once all the price haggling is done, hand the salesman your credit card.  They would much rather sucker you into their expensive financing, so don't be surprised if he complains.  Be persistent.

Then, you've got an extra month or so interest free before you'll get the credit card bill, too.  Just write your check to them instead of the dealership.

That's how I bought my new Yamaha back in 98, and saved more than $110 instantly for my insurance premium!

By the way, don't start treating your fiance better than you treat yourself.  That's a recipe for disaster.  Go buy yourself a new bike, too.

[sandcastcb750]

Ditto-Buy yourself a new bike, treat yourself well too.

Bike interest rates are high because;

Most young purchasers are a big risk. Questionable finances and the bike is usually worthless after reposession. Even if the bike is not damaged, they lose 50% value in very little time. I think the number crunchers have spent alot of time determining interest rates.

Unfortunately, people that have the money, can pay cash don't need the loan. Those people take advantage credit card deals and the credit companies don't like them.

I missed a payment of $54 on a card and they charged me $39 late fee and interest that month. It did not financially ruin me, but it was an insult.

Those that got, gets.

[nickjtc]

Unless you can avoid it never finance through the dealer. You will always pay higher than par interest rates. That is a way that they increase their profits, via the commission that they get from the finance company. The exception to this is if they are offereing zero percent financing as an incentive to clear certain models. Then have at it!

Loans for 'consumer durables' are higher than all others because this is 'easy money' for the financial institution. Although they make huge profits on mortgage interest these loans will invariably be at a higher interest rate, and therefore rake in more profit.

[Uncle Ernie]

I've listened in on a cvouple of sales pitches.  i don't think most of these potential customers even know what an interest rate is or how it works.  A good example now is dealers are advertising monthly payments- not prices.  I imagine some of these vehicles are going to end up costing a billion dollars by the time they get paid off.

Personally, I don't think I would take out a loan on what I consider a luxury item.  I've saved long enough so I pay cash.

[aptech77]

I've listened in on a cvouple of sales pitches.  i don't think most of these potential customers even know what an interest rate is or how it works.  A good example now is dealers are advertising monthly payments- not prices.  I imagine some of these vehicles are going to end up costing a billion dollars by the time they get paid off.

Personally, I don't think I would take out a loan on what I consider a luxury item.  I've saved long enough so I pay cash.

+1,  If you don't have the money...you shouldn't have the toy.....IMO

[edbikerii]

I've listened in on a cvouple of sales pitches.  i don't think most of these potential customers even know what an interest rate is or how it works.  A good example now is dealers are advertising monthly payments- not prices.  I imagine some of these vehicles are going to end up costing a billion dollars by the time they get paid off.

Personally, I don't think I would take out a loan on what I consider a luxury item.  I've saved long enough so I pay cash.

+2  If you don't have the cash, you can't afford it.  The only exception is a house in my opinion, and even then most houses are way over-financed.

It turns out that if you think this way, you will have more cash too.

[nickjtc]

+3. That's why I like old bikes; you can usually pay cash to get it and then pay-as-you go for the bits and bobs to tart it up.

[333]

In addition to the reasons already mentioned, only in America are motorcycles considered "recreational" in nature.  ATVs are indeed recreational, but you won't find any difference in finance rates between the two.

[GroovieGhoulie]

GG, even better tip for when you buy YOUR new bike...(SNIP)

(SNIP)... Go buy yourself a new bike, too.

I am sorely tempted, and THIS close to doing it.  I could pay 3/4 the cost up front and only finance a small part of it, but I'm not sure if I wanna.

I mean, I just rode for the rain for the first time yesterday and it wasn't because I have a fear of riding in the rain, it's that I don't wanna get my "precious" CBs all wet and see them rust and corrode.  I'd rather have a "everyday beater" bike that I can ride in the rain, whatever, and ALL parts are available from a dealer, I won't worry if it gets a little scratch, ding or whatever.  A warranty is a plus too.

Problem is I would feel like a "sell out" to the "vintage bike community".  Thats the only thing holding me back.

Well that and the fact that I already have a "new" bike.  It's the '76 750F with 760 miles on it.  Part of me says ride it and use it as Soichiro Honda intended, while part of me wants to keep it as a "Sunday Rider" and keep the miles down for value's sake.

So conflicted...

[aptech77]

GG, what bike(s) are you looking?

[nickjtc]

I mean, I just rode for the rain for the first time yesterday and it wasn't because I have a fear of riding in the rain, it's that I don't wanna get my "precious" CBs all wet and see them rust and corrode. 

Hey Groovie. These bikes are not made of sugar! Nor are they horribly prone to the effects of rain. It's salt that does them in, so as long as you don't ride when the conditions are making the salting/sanding crews do their thing you sohuldn't have any worries.

I always rinse Sophie off asap after a wet ride, anyway, mainly because I like her to look nice. A quick dry-off with an old towel and she's good to go. No obvious signs of 'new' corrosion since I got her 15 months ago. And riding in the rain is an exhilarating experience....as long as you have good rain gear, optimal brakes and adequate tyres.

[edbikerii]

Hey, I'm not really into spending other people's money either, GG.  I was really just commenting on how nice it is for you to buy your fiance a brand-spanking-new ATV when you yourself haven't owned a new bike.  If you aren't careful, she's going to start taking you for granted, buddy.  Nothing good will come from that.  Just make sure you take care of yourself first, and then you'll never have any regrets, no matter how things turn out.

Don't ask me how I know.

[GroovieGhoulie]

GG, what bike(s) are you looking?

Triumph Scrambler Blue/White with lots of the factory options.  If I get deployed to Iraq at the end of this year, I am TOTALLY buying one, (since I'll have the disposable income) if not, I'm 50/50 on doing it.

Gonna go try and test-ride one next weekend and see if I even like it, but I was eye-f*cking them at the local Triumph dealer and sat on a Bonnie for feel and I fell in love.

It would become my workhorse bike while the old stuff got babied and ridden for pleasure.

Still debating if the 750 will become the workhorse.

[GroovieGhoulie]

Hey, I'm not really into spending other people's money either, GG.  I was really just commenting on how nice it is for you to buy your fiance a brand-spanking-new ATV when you yourself haven't owned a new bike.  If you aren't careful, she's going to start taking you for granted, buddy.  Nothing good will come from that.  Just make sure you take care of yourself first, and then you'll never have any regrets, no matter how things turn out.

Don't ask me how I know.

Well we've been together for six and a half years now and I'll admit she's worked harder to make the relationship work than I have at times, so I don't think she'll abuse me or leave me.  We've been through stuff that would break up marriages, yet we're still together.  I really think I got lucky.  It's been a long, strange trip, but here we are.

Anyway,

She wanted a four-wheeler and seeing how they are "toys" and are abused off road until they are used up and thrown away, used models weren't tempting.  I figured, "What the hell, I love her, I just got back from Afghanistan, I got some money in my pocket, I'll buy new for her."  So I got her a new Honda Recon 250.  It's perfect for her and she loves it.

Though I bought myself two Hodaka dirtbikes so we can go out "muddin'" together, so it wasn't a total wash! LOL!

[medic09]

Oddly enough, when I recently bought my '01 Triumph, we used the credit card!  We've been paying off debts, our credit is good, and we have always avoided using those checks they throw at you.  So, there was pretty much the bike we were looking for, at an acceptable price.  Our cash flow is good, but a little short for a few months because of house repairs.  I called the credit card company (USAA) and asked what were the conditions on the latest check they sent?  If we hadn't asked, the interest was over 12%!  Since we did ask, there was a deal we could request, and get 2.9% for 12 months.  That's a lot better than the bank or anywhere else, and we figure we can pay off in less than 12 months.  Soooo, we did what we wouldn't normally do, and used the credit card check.

I don't exactly advise it; but it does show that sometimes if you ask around, you find useful surprises.

[DammitDan]

Cash is king my friend.

You can knock off 10% of the price just by flashing hundred dollar bills in front of their noses.  It worked when my parents bought me a car for college graduation 

You shoulda seen the salesman's eyes almost pop when dad pulled out this big wad of $100 bills.  He laid down 17 neat banded $1000 stacks on the guy's desk and said, "This is what you're getting.  If you don't take it, I'm sure the guy across the street will."  And strangely enough, the salesman brought the price down from $18,5 to $17k immediately.

[edbikerii]

Makes me want to go out and buy one of those stainless steel briefcases so I can pull that move next time I buy a big ticket item.  Very "Miami Vice".  Your dad is THE MAN!

He laid down 17 neat banded $1000 stacks on the guy's desk and said, "This is what you're getting.  If you don't take it, I'm sure the guy across the street will."

[BobbyR]

What's the best way to finance a motorcycle?  Go through the dealer?  A bank?

I've never bought a new bike, but I just bought the fiancee a four-wheeler because she wanted one.  I looked at financing, (at the dealership anyway), and the interest rates are INSANE for bikes and four-wheelers, so I just wrote a check and bought it outright.

Question comes though, WHY is it so high?  I bought my car at a 3% interest rate via my credit union, but bikes seem to start at 10% and go up from there.

I worked in the Loan business for two years until I got and honest job. It is all about risk and bikes have a high rate of reposession. Harley is having a big problem with defaulting loans and it is hitting their bottom line.
You can get a great deal on factory financing when they have a need to move product, they are now saying 'if qualified" which says you need a FICO score of over 750. I would caution people on thinking their Credit Cards give them some great deal, they don't. Today they have a clause called Universal Default on almost all cards - maybe yours does not now, but it will.                                  
Universal defualt is simple. You have a CC with a rate of 9.7% becuase you are a preferred customer. Now, you pay the light bill late for whatever reason and they mark you late. Your CC company has the right to jack up your interest rate to 26% in NY maybe higher or lower in other States. The late payment can be to anyone and they can jack you up. I know some will say "not me they can't" Well my friend, they can and they will. I know this since I hauled people out of debt every day for two years. They will do it to me and I have an 850 FICO, which I built by knowing how the system works. The CC company is not your friend and you are not special to them.
This has been a public service annoncment from BobbyR.

[BobbyR]

Cash is king my friend.

You can knock off 10% of the price just by flashing hundred dollar bills in front of their noses.  It worked when my parents bought me a car for college graduation 

You shoulda seen the salesman's eyes almost pop when dad pulled out this big wad of $100 bills.  He laid down 17 neat banded $1000 stacks on the guy's desk and said, "This is what you're getting.  If you don't take it, I'm sure the guy across the street will."  And strangely enough, the salesman brought the price down from $18,5 to $17k immediately.

No new car dealer in his right mind will take that anymore. They have be warned not to and many have rules against it. It had become common place for a guy to walk in lay a bunch of cash on the dealer and as soon as the guy leaves, other guys walk in with wih masks and guns and remove the cash. The world has changed sadly enough.

[edbikerii]

BobbyR,

Just to clarify, I wasn't suggesting that the buyer run a balance on their credit card at all.  I was suggesting that they charge the item on the card just to get the 2% cash back, and then pay it off immediately when the bill comes in.  That'll work only for a buyer who has all the cash available.

Ed

[DammitDan]

The dealership didn't seem to have a problem with the cash

The salesman went and got his manager and the manager came back with the security guard and they talked with dad for a minute.  They put the money in a sealed money pouch and after the paperwork was signed they took the pouch in the back and I drove off in a new car

I guess they're more trustworthy in Kentucky.

[BobbyR]

BobbyR,

Just to clarify, I wasn't suggesting that the buyer run a balance on their credit card at all.  I was suggesting that they charge the item on the card just to get the 2% cash back, and then pay it off immediately when the bill comes in.  That'll work only for a buyer who has all the cash available.

Ed

You are correct, pay it off right away or as soon as you can. Having 8- 10Gs in cash to pay it off right a way would strain a lot of people. My experience in working with people in deep CC debt soured me on the concept.

[BobbyR]

The dealership didn't seem to have a problem with the cash

The salesman went and got his manager and the manager came back with the security guard and they talked with dad for a minute.  They put the money in a sealed money pouch and after the paperwork was signed they took the pouch in the back and I drove off in a new car

I guess they're more trustworthy in Kentucky.

Never saw a Security guard in a dealership in NY. Which makes me wonder who is more trusting.