finance, whats better?

YZFer

YZFer

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give me your thoughts on what you think is better, to finance a motorcycle at a motorcycle show ei, Feb 21-23 at the direct energy center or at motorcycle dealer.
 
save your money and buy what you can afford with cash
 
I would never finance a luxury item. Car, maybe but not motorcycle
 
Wherever you can get the lowest interest rate. Some in house financing is pretty good these days so check with your local dealerships and your bank before the show so you at least have an idea of their rates.
 
If the financing is cheaper at the show, finance it at the show. If the financing is cheaper at the dealer, finance it at the dealer. I think what you want to do is buy the bike where the financing is cheapest. The inverse is also true. For instance if you went to the dealer and found the financing to be costlier there than at the show you would want to buy the bike at the show. The trick is to find out where the cheapest financing is at. I guess some sort of mobile electronic communicating device would come in real handy here but even a hard wired land based push button message sender/receiver would do the trick. Stay alert, stay focused, this is no time to relax, you'll be dealing with professional number crunchers. They'll make your head spin, you think you're getting a good deal, then WHAM!! you're OTD much higher than previously calculated. You see it all the time.
 
If I were you, I'd buy with cash... Financing ties you down until your loan is paid off and you're paying interest on it as well. It might not be much and you might not care, but it's something to consider. Whn you get quoted your monthly payment, make sure you calculate how much will actually be leaving your pocket until the bike is paid off, and then decide if that's something you want to pay for your bike. If you're paying like 16% interest, IMO it's best to forget it and buy cash.
 
Interesting comments. I'd only do cash now, but I'm older now and can do that. In my younger days I financed two bikes. No issues or problems, but I didn't overextend myself. Short term (if you can't afford a 3 year term at most on a current litre bike price, adjusting down for lesser bikes and costs, then you can't afford the bike imo) and my personal bank was able to give me the best rate. Try there first.

GL.
 
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As everyone has mentioned do some research…call the dealers and get some numbers quoted. Then go to show with that info, and negotiate at the show…if you're looking for a deal on a brand new bike don't expect much of a discount. Finance rates are also higher on older model years to help dealers move inventory….no different from cars.

Dealers will have 2013/2012 stock to clear out, show will have 2014 models.

When I bought my bike the dealer had a good finance deal so I took it. After a few months year I got tired of paying monthly so I ended up paying out the balance right away anyway as I had some cash come in.
 
If you can do better with your cash with investing, than you can by laying it all on a bike, then it makes sense to finance. Depending on your income level, and a bunch of other variables, putting money into RRSPs and doing a loan at a good interest rate can be a sound decision. I've always paid cash for bikes, but with cars, when the interest rate is low, I will borrow even when I have the money sitting in the bank, and I come out ahead.
 
mikbusa said:
If you can do better with your cash with investing, than you can by laying it all on a bike, then it makes sense to finance. Depending on your income level, and a bunch of other variables, putting money into RRSPs and doing a loan at a good interest rate can be a sound decision. I've always paid cash for bikes, but with cars, when the interest rate is low, I will borrow even when I have the money sitting in the bank, and I come out ahead.
Click to expand...

You take your opportunity cost mantra out of here good sir! :)


Type17 had a good suggestion. Make sure you know the total value of the bike (Cost +interest + term, etc).
This might be a good time to learn Time Value Money calculations. Also, read the fine print. Some terms will not let you pay off the loan early. The details are key. Make sure you're comparing apples to apples.

For toys, it's hard to justify financing when there are other things that money could be better spent, but it exists for a reason and if that's you're cup of tea, have at it. Good luck!
 
While I agree with others it's best to pay cash, I'll try and answer your question. I've been in the finance business for years and loans are something that can be made to look good when in fact they aren't.

Interest rate is only one piece of the puzzle. Many companies and businesses now charge "admin fees" to do your loan. While $200 or so might seem OK to get a good rate, you need to figure out how that affects your overall cost.

1) Check with your local bank and see what term/rate they will give you (as far as term I personally wouldn't go over 48 mths but that's just me).
2) Find out if there are rebates you can get in lieu of a lower rate.
3) Understand that the smoke and mirrors come out at shows and whatever rate you can get at the show is probably no better than the rate you can get a couple months later.
4) Find out what insurance coverages your bank (or the finance company you might be going to) requires. Most will require collision and comp with a minimum deductible which may be more than you were planning on.
5) Ensure the loan is calculated using a simple interest method. Most banks and credit unions only use this method however some finance companies still use other methods which can cost you hundreds of dollars more if you pay out the loan early.

Here is a website that can allow you to play around a bit with the term/rate as well as the effect paying a few extra dollars each year can do.

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx
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