Best to save up and buy used or finance new?

[slpywes]

So now that I've graduated from Cal, I want get back to riding again. I have a steady job but the problem is that I don't have $3-6K lying around to buy a used bike. Those of you who have bought used and new, what do you think? Should I finance a new/used bike from a dealership or should I just suck it up and wait a month or two to buy used from BARF or craigslist?

A little background:

I've bought and sold 2 bikes over the years, both from craigslist. One was a 94 secaII and was mechanically sound. The other one was a 92 gxr750 that was a mechanic nightmare. I had a lot of fun with both bikes and was able to fix the gxr but I'm really not looking forward to taking an entire engine apart again...

 

[rodr]

Congrats on the degree and job!

It's easier and cheaper if you pay cash. However if you'd get full coverage insurance anyway and you're looking to build a credit history, financing may be a good move.

 

[slpywes]

TY! I have never financed anything before and I have student loans to take care of as well so I guess it's an option that scares me. If I were to finance, would I be in way over my head? How does financing work? How much will I be paying monthly?

I know these are very basic questions but as someone who has never financed any purchases before, it seems really daunting. I really appreciate any input from fellow barfers.

Oh, and if I were to finance, are there any dealers that anyone would recommend? I've never been to a motorcycle dealership before so I don't mind just checking it out first and then make a decision later =)

 

[Ant]

Both.

Once and while, here and there I feel financing something to make a dream happen is the way to go if that's an only option. Life is short to worry about every single nickel. And this is coming from a frugal dude btw.

 

[High-Side]

Your payments depend on how much the loan is and how much you put down. Of my last four bikes I own I bought the first one used and financed the last three.

 

[Vanilla_Gorilla]

If you only have to wait a month or two, save up and buy used. Way more bang for your buck and there are SO many awesome bikes out there in your price range.

 

[slpywes]

If you only have to wait a month or two, save up and buy used. Way more bang for your buck and there are SO many awesome bikes out there in your price range.

haha I know, my mind tells me to grow up and save up and not buy things on credit but my youth wants instant gratification and man, the weather in the east bay has been so nice lately!

 

[rodr]

TY! I have never financed anything before and I have student loans to take care of as well so I guess it's an option that scares me. If I were to finance, would I be in way over my head? How does financing work? How much will I be paying monthly?

I know these are very basic questions but as someone who has never financed any purchases before, it seems really daunting. I really appreciate any input from fellow barfers.

Oh, and if I were to finance, are there any dealers that anyone would recommend? I've never been to a motorcycle dealership before so I don't mind just checking it out first and then make a decision later =)

Oh man, you've got some basics to learn and you won't get it all here. Try something like this. Don't go to a dealership yet, they'll take you to the cleaners.

 

[Oh My Sack!]

Most dealers PREY on guys like you. Young, trying to establish credit. I haven't shopped a new bike for a long time but I bet you'd be paying credit card sized interest on a purchase that is financed through a dealer but they will entice you with the "only $75 a month" plan.

I have a buddy that just sold an '05 R6 that he bought new while in college. After almost 6 years of ownership, he STILL had a note on it that had to be paid. That is fucking STUPID! Also, depreciation is high on bikes so unless you put down some big coin, you're upside down in the value the second you drive off the lot.

With that said, there's nothing wrong with getting established in your credit history, just do it wisely and listen to that adult thought in your head, especially in this day and age. Get qualified from the bank you do business with or a good credit union if you can, with a reasonable interest rate. Save some money for a while so you have something to bring to the table when you're ready to do a sale. Nothing wrong with buying from a dealer for a used bike if the price is right but I'd look to the barf and buy used but maybe near new. Having your financing and a solid down payment in order will give you a bargaining chip with both a dealer and a private party.

 

[SNsMoto]

Both.

Once and while, here and there I feel financing something to make a dream happen is the way to go if that's an only option. Life is short to worry about every single nickel. And this is coming from a frugal dude btw.

+1 all the way. I spew this motto to people I know who take things a little to seriously and need to live a little. Life IS too short and you sure as hell aint taking the money with you when you're gone-- however, you are the only one who knows your life and financial situation better than any of us; since you went to Cal, I assume you have the common sense to decide if you your current situation will allow you to be able to afford a financed bike . If yes, go for it and enjoy your new baby.

If no, then save up $. It's pretty simple, though I'd have to assume that since you're asking you probably shouldn't be financing a bike right now.

 

[SummerLove]

If I was working full time right now.. I'd probably finance my next bike. When I was looking at options to buy my first bike I could get 5-10k in a secured vehicle loan at 5%.
For the record I'm 23 with okayish credit but little credit history (unemployed for a while now so I paid off and cancled all my credit cards and like). Thing was I didn't want to spend more than 3500 on my first bike and I was only looking for about 1.5k in a loan instead of waiting 3 more months to save that up.
If I had a full time job I'd finance my next bike just to build credit. You're situation might be different so it's really your decision.

 

[slpywes]

Most dealers PREY on guys like you. Young, trying to establish credit. I haven't shopped a new bike for a long time but I bet you'd be paying credit card sized interest on a purchase that is financed through a dealer but they will entice you with the "only $75 a month" plan.

I have a buddy that just sold an '05 R6 that he bought new while in college. After almost 6 years of ownership, he STILL had a note on it that had to be paid. That fucking STUPID! Also, depreciation is high on bikes so unless you put down some big coin, you're upside down in the value the second you drive off the lot.
With that said, there's nothing wrong with getting established in your credit history, just do it wisely. Get qualified from the bank you do business with or a good credit union if you can, with a reasonable interest rate. Save some money for a while so you have something to bring to the table when you're ready to do a sale. Nothing wrong with buying from a dealer for a used bike if the price is right but I'd look to the barf and buy used but maybe near new. Having your financing and a solid down payment in order will give you a bargaining chip with both a dealer and a private party.

Thank you so much, this is the kind of information a newbie like me is looking for. So based off of your knowledge and experience, it would be wiser of me to go to my bank (Bank of America), which I've been a loyal customer of since 7th grade (wow, I feel old now...), and get "qualified" with a reasonable interest rate. Does that mean get a small personal loan? Essentially I would be financing my motorcycle purchase through my bank instead of the dealership right?

I did a little research and read that it's harder to get small personal loans because they are unsecured, meaning that banks are more at risk relative to secured loans where they would have collateral in case I default (ie. a house, a car, etc.). Is the internet right or is it time for some barf ejumacation?

 

[slpywes]

+1 all the way. I spew this motto to people I know who take things a little to seriously and need to live a little. Life IS too short and you sure as hell aint taking the money with you when you're gone-- however, you are the only one who knows your life and financial situation better than any of us; since you went to Cal, I assume you have the common sense to decide if you your current situation will allow you to be able to afford a financed bike . If yes, go for it and enjoy your new baby.

If no, then save up $. It's pretty simple, though I'd have to assume that since you're asking you probably shouldn't be financing a bike right now.

I am asking because I've never done something like this before. Always bought big purchases with cold hard cash so I'm not sure when someone should be financing or shouldn't be. Thanks for the insight though!

 

[SummerLove]

I know TechCU offers low interest secured motorcycle loans. I know because TechCU who I was looking at financing through until I found out they would only finance 5k or more for a secured motorcycle or car loan. You will definitely get a better deal from a local credit union if you have decent credit than from a dealer.

 

[slpywes]

If I was working full time right now.. I'd probably finance my next bike. When I was looking at options to buy my first bike I could get 5-10k in a secured vehicle loan at 5%.
For the record I'm 23 with okayish credit but little credit history (unemployed for a while now so I paid off and cancled all my credit cards and like). Thing was I didn't want to spend more than 3500 on my first bike and I was only looking for about 1.5k in a loan instead of waiting 3 more months to save that up.
If I had a full time job I'd finance my next bike just to build credit. You're situation might be different so it's really your decision.

I'm 22 with okay credit. Paid a credit card bill late once, just paid off all credit cards. I have a little more than 1K to drop as down. I don't want to spend more than $3000 for this bike since I'm kind of looking for an older CBR f3, f4i.

Based on the input of other members, I'm starting to lean towards financing with my bank and buying used from BARF, craigs or dealer.

Anyone have some information about getting a secured vehicle loan? I don't want to walk into BOA not knowing anything.

 

[Bay Arean]

As handy as you are, I would think used. More selection, as pointed out, and you can probably spot obvious things as you look. There are so many little ways that buying new is extra expensive, from insurance to service contracts, to very simple improvements from new that every buyer goes through; likely already done on a used bike. This is a bigger lesson about a lot of purchases made in your lifetime really.

I wanted to buy used but two things stopped me: one was that I did not have the cash and had to use a credit union which would involve seller meeting in office to show clear title. I talked to the credit union and they won't just give you the cash to go out and find something, at least mine wouldn't. They want to see the bike, or at least that it's title is clear before they take the risk on you. This eliminated the ability to bargain and shop around.

Many, many sellers on CL want cash in hand, etc etc. The other thing was that I wanted the new model of my bike because they offered the mag wheel option which is great for vertically challenged folk. There are no older Bonnies with mag wheels that I know of and I lack the skill to make some kind of adaptation.

I have often wished I would have bought used, just because having it new is its own kind of obligation, from the first scratch to break-in periods, etc etc....It's pretty hard not to keep a brand-new bike shiny.

I would not agree that you will be taken to cleaners by dealer regarding FINANCING. My dealer found a credit union that gave very favorable APR etc. I had the same experience with my car. I bought used but the dealer found that my very own bank could beat the credit union price but that loan was only available THROUGH a dealer.

What the financing dept WILL do is try and sell you a service contract AND that gap insurance which covers the amount you owe that might exceed the price of the bike in your early terms of payback in case of loss (bike is totaled but you only get what its worth, not any extra financing charges etc etc). I went for the contract because I really am not great with mechanic-ing, but passed on the gap insurance (the logic being: pay down to what the bike is actually worth asap but risk that period). I haven't had a real reason to regret the service contract though I do feel somewhat at the mercy of the dealer's technicians which is another can of worms.

 

[Oh My Sack!]

Thank you so much, this is the kind of information a newbie like me is looking for. So based off of your knowledge and experience, it would be wiser of me to go to my bank (Bank of America), which I've been a loyal customer of since 7th grade (wow, I feel old now...), and get "qualified" with a reasonable interest rate. Does that mean get a small personal loan? Essentially I would be financing my motorcycle purchase through my bank instead of the dealership right?

I did a little research and read that it's harder to get small personal loans because they are unsecured, meaning that banks are more at risk relative to secured loans where they would have collateral in case I default (ie. a house, a car, etc.). Is the internet right or is it time for some barf ejumacation?

With the economy the way it is and the banks sucking ballz even though they have the money, I can't speak for certain on what the climate would be for you at an independent bank but buying a "used" bike, you might be forced to do a personal loan that is non-collateralized which could be hard now.

I would go in and see what your options are first, BEFORE seeing a dealer. I wouldn't discourage you from financing but certainly not at mafia rates from most dealers. If you secure financing outside of the dealer, you can DEAL with them since you're essentially paying cash. They don't have to know where it's coming from. Check credit unions. Your employer or type of employment might allow you to join one. Sometimes family members can get children or siblings in. Check it out. These institutions are generally more lenient with lending terms and usually offer rates that will smoke any bank, especially BofA which IMO, is the absolutely suckiest banking institution on the planet. That's just my opinion, though.

 

[slpywes]

With the economy the way it is and the banks sucking ballz even though they have the money, I can't speak for certain on what the climate would be for you at an independent bank but buying a "used" bike, you might be forced to do a personal loan that is non-collateralized which could be hard now.

I would go in and see what your options are first, BEFORE seeing a dealer. I wouldn't discourage you from financing but certainly not at mafia rates from most dealers. If you secure financing outside of the dealer, you can DEAL with them since you're essentially paying cash. They don't have to know where it's coming from. Check credit unions. Your employer or type of employment might allow you to join one. Sometimes family members can get children or siblings in. Check it out. These institutions are generally more lenient with lending terms and usually offer rates that will smoke any bank, especially BofA which IMO, is the absolutely suckiest banking institution on the planet. That's just my opinion, though.

Will do. For my own personal reference, what would you say is a good rate? I'll be using this % as a reference to decide what direction I'll be taking.

 

[SNsMoto]

I'm 22 with okay credit. Paid a credit card bill late once, just paid off all credit cards. I have a little more than 1K to drop as down. I don't want to spend more than $3000 for this bike since I'm kind of looking for an older CBR f3, f4i.

Based on the input of other members, I'm starting to lean towards financing with my bank and buying used from BARF, craigs or dealer.

Anyone have some information about getting a secured vehicle loan? I don't want to walk into BOA not knowing anything.

A lot of people are scared to finance through the dealership because they hear so many horror stories when in fact if you do your hw, financing through a dealership has some of the best deals because of promotions they have going on.

Sometimes they'll have 2.99% APR or sometimes even 0% etc. The part people are scared of is all the number crunching with the salesman. The easiest thing to do is bring your financial calculator that has time value of money functions and you can get great deals. I always nerd it out and bring my calc when my buddies ask me to tag along .

That said, should you still decide to go through a bank, it's pretty straight forward:

-You go in the bank and apply for a loan
-Your credit will be run and you are either going to be approved or declined
-If approved, the bank cuts you a check and you purchase your bike.
-You pay the bank monthly

It's hard getting approved for loans right now and rates aren't all that great. Remember, the first time you go rate shopping you have a grace period to shop around at other institutions so that your credit won't be dinged any more than it did the first time.

 

[slpywes]

Oh and a technicality question for those in the know: Do motorcycles count in the category of "auto loan" or is it a "personal loan?"

You would think banks would make this kind of information more readily available without having to go into the bank and talk to someone...