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Financing

Discussion in 'General Motorcycling Discussion' at netrider.net.au started by thestig, Apr 11, 2009.

  1. #1 thestig, Apr 11, 2009
    Last edited by a moderator: Dec 3, 2014
    So what do people think of financing? Best deals? Against it? For it?



    Its seems to me that all the biggest baddest bikes are available for around $150 a month? Not sure how long for but I reckon most people would hardly notice that given that its a mode of transport!

    Thoughts?

    Ok upon further inspection... that may have been weekly pricing.... MY BAD!

    Still though thoughts on financing would be good.
     
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  2. Financing is just another tool that works differently for different people.
    You need to really understand your needs, disposable cash flow and the effects of depreciation on your purchase.

    The main two ways loans are used are for you to pay off the bike over a few years with a view to total ownership. Other wise you can set up a loan as a lease where there is money owning at the end, but its covered by the sell on price. That way all your payments are basically like renting it for that time period.

    Either way you'll pay interest for the privilege.
     
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  3. Debt is the work of satan.

    You do realise that if you want to finance, they'll make you take out comprehensive insurance? Comp for a 19 y.o. riding a FZ1 or what-have-you is going to make you broke. Seriously dude, just start saving. When you have to hand over $15k in cold hard-earned cash for something, it really makes you appreciate things a whole lot more. You get more out of life that way.
     
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  4. Financing through the dealers may be easier but is usually alot more expensive than a bank loan, all depends on your circumstances, and ability to qualify for types of loans. when i got my upgrade bike and my wifes yep had to get comprehensive insurance but would have anyway as i wouldnt want to be paying off a bike and then not having said bike due to a accident anyway.
     
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  5. Personally I don't go into debt for anything that is guaranteed to depreciate _and_ accrue interest over time, but that's just me. If you want the swankiest bike to suit your needs and need to take out credit for it then more power to you. But just keep in mind that there are many ways to get credit, make sure to do your homework and find the right financing that works for you and your lifestyle.
     
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  6. I hate to sound like your parents, but I agree with most of the people posting here that finance at 19 can be evil.

    I'd think very carefully about buying an expensive vehicle (car or bike) on finance and becoming a slave to it. I don't know what your personal situation is, but when the majority of your paypacket goes to a loan on something that depreciates the feeling can be horrible.

    There is nothing worse than wanting to change jobs, move etc and being unable to do so because of repayments on a large debt. usually with a new bike or dealer second hand bike it is difficult to seel it for what you owe in te first year of the loan.

    My suggestion would be that if you really want to buy a bike with money you don't have, buy the cheapest bike your ego can cope with.
    In general, avoid dealership finance it is usually more expensive. Buy near new privately and you can find a bargain.

    Good luck.

    Now if only I could take my own advice.

    Rob
     
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  7. However, in the terms and conditions, it is a requirement that you have the goods comprehensively insured AT ALL TIMES FOR THE LIFE OF THE LOAN.

    If you opted for other insurances in there, ie Gap or CCI, these wont pay out either unless you have comprehensive ins as well.
     
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  8. Mate, not having comprehensive insurance on a bike you have a loan is just crazy. ANYTHING you have a loan on you should have comprehensive insurance. What happens if you write it off? You're stuck paying off something you don't even have anymore for another year or two.
     
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  9. I think what he's saying is that it is all covered under the repayments. I guess that is why you pay more through a dealer than just getting a loan through the bank.

    To everyone else I understand. (You guys are all bike freaks as well and must always be tempted by it! :p )

    The way I see it though, if you have a stable income, (which I sort of do and have sfa living expenses ) it seems silly to spend all that time saving for the sake of paying interest especially when prices of bikes seem to keep going up and up (sinking dollar etc).

    I guess you have to ask yourself, is the opportunity cost of not having the bike all that time, greater than the cost of interest?

    I was going to buy a P.O.S bike but then I found out I was going to have it for over 3 years now this P2 thing is in place. Thats why I thought I might as well get something a little more decent.

    Does anyone else agree that if you have an investment that yields enough to pay off a bike, then despite the fact that you have a depreciating asset, you get it for "free" because your other asset pays for it?

    Also even if you pay upfront it still depreciates. The interest is the only difference. I guess, it would be good if your payments were enough to keep up with the depreciation (which I somehow doubt) and that way you could sell it, pay the early fee and move on to whatever is next.
     
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  10. It's not so much the interest and depreciation of fianance, it's the fact that it ties you down so much, at 19 years old. I did the same thing, I bought a 2004 Ford XR6 on fianance last year at 19 and I totally regret it, theres a fair bit of shit I would have liked to do, and still would but I'm just trying to get rid of this fcukin loan.

    I'm sure you'll probably take this with a grain of salt, I was the same way too. Maybe you will have to learn the same way I did
     
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  11. If the cost of insurance is incorporated into the loan, then at the end of the day you are still paying for a loan on a motorbike plus comprehensive insurance for said bike. The diff is that it is packaged into one payment. I have never bothered to reverse engineer the mathematics, but I highly doubt you are getting anything in the way of a discount for doing it this way, in fact you may be paying more just for the convenience.

    If I was to add the cost of insurance with InsureMyRide for a 20 y.o. with two years experience riding a brand new FZ1 with maximum excesses in case of a claim, then we are talking $4 grand more per annum in repayments. Change that bike to a 8 y.o. FZ1 and we are still talking $3 grand more per annum in repayments. Even for one year, this is a small fortune to a 20 y.o. at $15 per hour, believe you me, which is the point I was making.
     
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  12. :? Sorry mate, but that is among some of the worst advice I've ever seen on this forum! If that's what your circumstances are, you are actually in the best possible position to save before you buy.

    As far as bikes go, buying an ultra-low km dealer demo and paying for it with your own hard earned is the best possible thing you can do, IMO.
     
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  13. Fair enough I understand what your saying.

    So when is financing a good idea? I just don't reckon half the things in the world today would happen if it weren't for financing. I guess those things are things that make money as opposed to depreciating though.

    Does everyone here own their houses outright?

    Don't get me wrong Im just toying / turning over ideas in my head. In the end I'll probably just save up like I have for all my ridiculously expensive push bikes cuz in the end I'm scared of the debt as well!
     
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  14. Yup, your dead right whipster, IF you can save your much better off.

    If however you do go into a contract you have to work out how much you new pride and joy is going to cost you.

    This was my thought process when I brought my new ZX14 late last year.

    The list price on a 2008 ZX14 SE was $19,300 (approx $21,000 on road).
    Financed at 13% the total amount repaid worked out at $28500 (approx).

    expensive.......

    I got my ZX14 for $15000 ($16500 on road, end of year they wanted to clear stock). Financed at 13% the total amount paid would be $22500 (approx).

    If they kept the same price on a 2009 model (and they usually go up) then the finance has only cost me $1500 over 5 years compared to if I had of paid cash for the 2009 model.

    I thought the deal was too good to walk past..... so I took it.

    Just make sure your walking into the deal with both eyes open

    OZ
     
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  15. Maybe I'm to rash with money but hands up who would turn down a ZX14 for $1500 over the course of 5 years! I rekon you would save that just in fuel over that period compared to my xtrail! Of course this relies on the fact that you can sustain the payments.
     
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  16. Debt makes people rich and poor in equal measure. It can help you gain equity in a house or expand a business, both of which are (generally and long-term speaking) appreciating assets. Unfortunately people are for the most part either stupid or greedy, and cannot manage their debt even on an appreciating asset. Which is why we get mortgage foreclosures and corporate collapses.

    Debt should never be used for a depreciating asset like a vehicle. It goes back to the traditional question levelled at five year olds to assess their mental development: you can have one chocolate now or three in five minutes. Most children choose the former. Most adults also choose the former, which shows how much they have progressed since childhood.

    I've just seen oz_johnno's post. He is using debt to his advantage to exploit market cycles. Alot of good for nothing speculators do this to make a living, contributing volatility to the market when they all try to cancel out of their positions at once. But Johnno's cool, he did it for god's own motorbike, a ZX-14. :cool:
     
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  17. .... Yeah I actually know all this its just by nature I'm impatient... I sense you have a financial background hehehe. Maybe I'll have to learn to play the markets like oz_johnno did.

    So its alright so long as i get a ZX14 right? **Ducks for cover**
     
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  18. Providing you have a buyer lined up for when you lose your licence doing 186 mph ..... yes!
     
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  19. I reckon you need to read this, thestig: Get a POS

    Also, why would you want to start with the latest and greatest? Personally I'd be afraid of topping myself. I've made a few posts around the place on doing up my RS125. It should owe me arond 2.8k by the time its on the road, and thats with new tyres and a top-end rebuild (the latter is pending but accounted for). Gear set me back $500, and I'm budgeting another two-hunge for kevlar jeans of some sort.

    So call it $3500 for my refurbished bike and gear...and although I've had to put in some elbow grease I think I've come out pretty darn well. I'd also dare say that youcould get on the road for less. How much less is up to you, but don't skimp on the gear. I got the majority of my gear first and have only now got myself a bike to go with it, some 8 months later.

    You may want to consider student loans if you are studying, which are generally interest free until you finish studying and thus give you ample time to pay them off. Assuming they aren't excessive, that is.

    Cheers, and good luck with investigating - boingk
     
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  20. Yeah I didn't take the cost of speeding fines or loss of licence into account when making my calculations.
    I have only opened it up once and (luckily) got away with it.

    It is truely a beast and I almost feel like I have to take a prayer mat out to the garage and pay hommage to pammy every morning lest she spit me down the road next time I ride her :)

    OZ
     
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