Financing a bike, what did you do?

[Shiv]

Perhaps a stupid question but I was sitting here, thinking about random stuff, and my mind wandered to motorcycles and I was trying to figure out how long I would have to work a part timer to afford a cycle.

I have $1,000 saved. At minimum wage I'd make about $400 a month (20 hours a week) so I figure I could finance a cycle with a dealership or get a loan from a bank or something.


So the MSRP of a EX500 (probably the bike I'll go with, easy to find (as opposed to my first choice, a SV650) and cheaper, too) is about $3,000 according to KBB.


Now, the point of the post: Should I finance the bike or save up til I can just buy it out right (that and the gear).

Did ya'll finance your bike? Would you recommend it or just saving up til I can buy outright?

[jmillheiser]

If you finance you need to factor in full coverage insurance which will be high for you due to your age.

Maybe you should consider finding something better than a part time minimum wage job before getting a bike.

I work a full time job with decent pay and still ended up buy a $500 UJM to start on. I had thought about financing a bike but decided not to, planning on getting a new car this spring and dont want multiple vehicle payments.

[flynrider]

Are you thinking of a new bike? I assumed so, since you mentioned MSRP. The MSRP of a 2006 EX500 is $5049. Realistically, you can probably knock a hundred or two off that if you buy during the winter months. Were you maybe thinking of the EX250? That one has an MSRP of $3K.

As for financing or saving, it depends on what you can afford and your credit rating. If you have little or no credit, you'll be paying a very high (some would say criminal) interest rate on your loan. If that's the case, you're best bet might be to save as much of the purchase price as you can, then finance a small piece of it to establish your credit.

[Shiv]

Would prefer it not to be new since it'll be my first bike.


But some dealers around here deal with used bikes and they go off the MSRP (that and it's what I compare prices to. Saw a 97 GS500 on craigs listed at 4000 when KBB suggests 2000. KBB isn't law by any means but it gives a general idea).

Maybe you should consider finding something better than a part time minimum wage job before getting a bike.

Because I'm a college student and can't work full time. I don't know if I would get minimum wage but it was just a figure to go off of.



I suppose I'll have to just save up my money until I can afford to just buy one flat out.

[CNF2002]

Shiv, sounds like you've got the right idea, buying a small used bike at first. Since you're in college I would say wait until you can buy it outright...maybe get a less expensive bike. 3K was alot of money for me when I was in college! Don't forget other expenses, such as gear, which can cost up to 500-1000 dollars depending on the brand/quality/etc. If you're just looking for a good commuter, and not to impress the gals, then it doesn't have to be pretty.

Don't work just for the bike though...save that money for beer

[canuckerjay]

Yup -- get a cheaper used beast that you can kick around on for a while. Don't go sinking a lot of dough into a newer bike, gear, insurance etc. Right now you've got to cut (not add) expenses.

I know how you feel bro; I had my first bike during university and had to sell it -- just couldn't afford to run it and frankly I needed the measly thousand I got for it. Sit tight, the bike you really want is waiting later down the road, and you'll enjoy it more because with increased financial stability, it won't be a source of stress at all.

[DivideOverflow]

Most banks wont even finance less than $5000 dollars. They dont make enough off of you with any less than that.

That being said, find a nice sub-$1000 bike and buy it outright. It will be cheaper on insurance, and your pocketbook. I was able to get my KZ650 for $700, in good condition.

[cb360]

Yep - if you're a student, get a cheap bike you can pay cash for. Check craigslist and the cycle trader religiously and you'll get a sense of the market. There's tons of places on the web with good used bike buying advice incliding right here. My two cents is that you'll ultimately get a way better deal buying from an individual than you will buying used from a dealer. All the used dealer bikes I see around here are usually horrible deals... especiall from the exclusively second-hand shops. There's a shop 20 miles north of here that always has over 100 used bikes out front and every single one of them is rusty... AND priced way over book for 'excellent'. It always amazes me that they sell ANY of the bikes, let alone be able to keep the doors open. I've gotten really quality used bikes for substantially less than their market value several times. You just have to be obsessive about researching the market and above all, be willing to walk away from a deal. If you look hard enough the right deal will come along. I know it's hard to wait, but being in a hurry is not going to serve you well if you're on a budget.

[eugeart]

You are faced with the classic dilemna- conflicting interests/wants and some money to burn.

If you have some access to money for emergencies- ie student loans, grants or parents you might consider spending your cash. If not hold on to it because emergencies always happen and you will need the $$$.

That being said, you can certainly find an excellent used bike from an individual. I repeat- individual. Stay away from used dealerships if you value your time and money. They will rip you off on a used bike. They have to to make money on it. It will have too many miles and will have probably been wrecked or abused at some point. They will ask for thousands over what it is worth.

Research the bike you want and look in the paper and cycletrader.com for prices and condition. You will find a bike at a reasonable price and mileage. Ideally a bike with around 12k-15k that has been taken care of is a good buy. Few will be absolutely perfect. Bikes will go for alot of miles before they totally krap out if well cared for. I've heard of 100k+. Read reviews about the problems that certain models have. Remember- they all will have something go wrong at some point, so discern bitching from real manufacturing defects pertaining to models and makes.

Brand new is nice. Interest rates are not. Unless you are willing to pay cash for a new bike don't make payments unless you find something low like 1%. Yeah right! If you pay interest you will pay thousands over retail before it is paid off, not to mention the insurance you will pay. Offering 99$ a month at 7%? Sounds easy. You will pay 10K$ for a 5K$ loan over seven years. BTW- rarely do dealers stick to MSRP and you won't find much of a deal unless you are extremely lucky and/or savvy.

Good luck- your bike is out there you just have to find her.

[cb360]

Well said eugeart. It always cracks me up when someone says they paid xxxxx for a bike that they financed. A lot of times they'll actually pay 40-50% more than the purchase price once all the payments are made. The sad thing is that with the state of math knowledge in the general public these days, a good deal of the time people don't even know how much they actually paid. I don't know what to say when someone says 'pay a couple grand more and get a brand new bike' without the possible repair issues. Unless you are paying cash for the new bike it's usually nothing remotely close to 'a couple grand more'. Nothing wrong with buying new bikes of course - it's just that people routinely underestimate what they are really paying and a great deal of it is usually interest. It is surprising how much a seemingly small number can add up when compounded monthly over a period of years.