Motorcycle financing question

[kellanv]

Now I might get flamed for this but...

My GSF was purchased through the suzuki card program. I put a considerable amount of cash down at first as a down payment and financed the rest. Am I having credit problems? Nope and here is why....

DO NOT PAY THE MINIMUM PAYMENT EVER! Especially at first. The way that these things are compounded can get you in real trouble if you arent careful. If you are getting say a 10% interest rate on an 8000 dollar bike and you pay the minimum 100 a month, you are actually paying 80 dollars worth of interest, and 20 dollars worth of bike...you do the math..at that rate you would only pay off around 1200 bucks in 5 years, leaving you the rest of the amount at a 21% interest after that point.

HOWEVER I went in with cash, and extra money in my account so I could pay 2-5 times the minimum, especially in the first year, that way the card could be paid off within a couple years, and especially after the first year, the money going to interest is not such a big deal any longer (say 10% of 2k dollars instead of 8000)

I'm not saying it was totally the right way to go, its just what I did and have no regrets. I am debating possibly going through my bank to see if I can get any better of a deal through them(say a card with lower interest etc)

Anyway, whatever you do just make sure you know what you are getting into and can afford it(at the same time leave a cusion in case of emergency)

-Kellan

[CNF2002]

Story, that's great. I hope it works out for you.

I'm sorry you feel as though someone is unintelligent because they refuse to play the credit card game. Its a risky game, and it sure can pay off. One slip-up however, and you're sunk. Frankly, that's not a risk I would be willing to take with my family's finances.

Paying $500 a month on a $50,000 zero interest balance will take you 8.3 years. How long is the zero interest for? The life of the loan? Those are rare, so I'd assume it has a deadline when the interest jumps. What happens then? Does it begin calculating that interest on the current balance or the original balance plus all the interest you should have accumulated up to that point?

How is your 3% return calculated? Is it portioned out from the number of purchases you make? (example: many of the cash back rewards only come back in pennies per purchase, up to a maximum, meaning you have to make thousands of purchases a year to reach your maximum dollar amount), and does it have a maximum annual cash return, if so how much?

You say you have 2 ironclad promises from insurance companies. By that I hope you mean you have appropriate signed documents that would be admissible in court. Or did they just give you iron-clad promises over the phone? Or in person? How much 'trust' do you have in those insurance companies to not throw a wrench in your cash back plan?

I'm sure I don't know all the details of your specific credit card plan, since there are thousands of them out there. But there are factors that put your plan at risk. If you are willing to accept it, fine.

Let's say he takes such a brilliant plan and socks 8,500 into the credit card. He's got his zero interest for such and such time. He divides up his payments and schedules it paid off before the offer expires, he's got it all figured out into his budget.

Then a month he loses his job, or he's rear ended and lands himself in the hospital for 2 months. Or his girlfriend tells him she's pregnant. Or any one of a million things that can suddenly find you with a drastic reduction in disposable income. What will happen to that $8,500 credit card now?

It's a bit alarming for you to assume anyone who's not willing to play with credit card companies to make a few hundred bucks is ignorant.

To each his own. Here's a flower.

[storysunfolding]

Ironclad in writing and they gave me the 30k to pay it off within a week. I have about 6k on it currently. I plan to pay it off with my 20k bonus in january but i could pay it off at anytime from money I have currently. I however like to keep my liquid funds above a certain level when I have that option. If I were to say get in a car accident and lose the use of my right arm and it put me out of work, then I would still get 85% of my current income.

My card takes the lump sum of purchases made in the year, multiplies by 3% and gives me the money. No there is no maximum and there are no limits per purchase. and any purchase made in the first year is interest free. It's different than the cards that offer free interest for the first year. Subtle difference but again it's why it pays to do some research.

I'm not saying that someone is ignorant if they don't want to play with credit. It does take planning and a bit of work but it can pay off in less money spent and more leverage in funds. However, whenever credit comes into play you only throw out evils and bad situations ignoring all the possible situations with a good turn out.

[CNF2002]

If you have a job that includes a 20k bonus, I'm guessing 50k debt isn't much!

[storysunfolding]

Are you kidding? 50k is killer, imagine if I was being charged any interest rate! And it's not that I had all 50k on the card at once, it's the accumulation of everything I've had on the card in a year. $30+ of which being medical bills. $28k being the first 24 hours worth...

25 mph accident. Everyone walks away without a scratch... I get a disgruntled airbag that wants to turn my humorus into 3 pieces... thank God for insurance.

[ebayninja]

My day job puts me in contact with MS Excel, so I ran your numbers. At 12.95% interest, 5 years (60 months), and $6,700, your payment should come out to about $153.00. The interest rate seems high to me. You should be able to do better at bank, or credit union, but they will want some sort of down payment.

If you are patient, you may still be able to find a better deal on the bike itself . Last month, I spotted my bike on Ebay, used, but $800 under list with less than 300 miles on the clock! Consider what you will trade for price.

Don't let you heart write a check your finances can't cash!