[Vlad]

Really necessary information for many people. Good article. Another mistake buyers often make is failing to realize that proper gear not only contributes to safety, but to comfort. A good riding suit, with a liner, vents, etc. can easily double the miles you can comfortably do in a day, just as a good helmet can make your head feel a lot less like a used soccer ball than it might after a three hour ride. So plan to buy some good gear. Include it in your budget. Without it, motorcycling is much less fun.



Francis

 

[35244]

Here is a different twist: live within your means. Buy a good used bike and pay cash.



THEN, save systematically until you have enough saved to PAY CASH for that bike you really wanted in the first place.



You'll rarely be riding the newest, sweetest thing on two wheels, but what you give up in eyecandy factor, you gain in freedom...freedom is where it is at!.



Signed: "been there, done that and learned a lesson!"

 

[Marin_Cycleworks]

It's worth noting that most finance programs from the factories are designed to help dealers sell bikes, and can often have lower rates than even a credit union. To a commercial bank, a motorcycle is a toy, not a necessity like a car or a house, so the rates are higher. Also, the rate you're offered mainly depends on your personal credit history.



That said, there are lenders targeting sub-par credit applicants with really high rates, purchase fees, steep late payment penalties and so on. We use them only as a last resort if somebody really really wants a bike and can't get financed by anyone else.



In this day and age, it seems like your credit record is more important than if you have a criminal record.

 

[sarnali]

Very true, I've worked hard to get and maintain an excellent credit score, to the point I can walk in and buy almost anything I want.



I can't believe some of the crap I get in the mail from credit card companys and mortgage lenders. The other day, for example I got a real bonafide check for $25k 2nd mortgage, all I had to do was sign and cash it (@17.99% interest)



The fact that I have good credit should be a clue that I'm not going to pay 3 times the interest rate for a loan I don't need in the first place...

 

[kpaul]

Best Post here maladg (Excellent words of wisdom)

Excellent Excellent advice. I pay cash for bikes and cars. The only thing I don't is for appreciating assets i.e real estate. Yep I may not have the latest SUV or sportbike but I go to bed knowing that if something happened to my job etc. I could make it... But you are right you have to give up the race of keeping up with the Jones. A friend of mine who is a realtor tells me that 95% of his clients are overextended in vechicle debt and credit card debt. They drive brand new SUVs, large houses, .... but if something happened they are a couple of paychecks away from foreclosure , repossession or bankruptsy. I have no credit card debt either.

 

[44510]

Motorcycles, like beautiful women and MathCAD, are objects of lust. Most of the guys who fall into the financing traps are blinded by emotion and couldn't any sooner ask the relevant financing questions than delay a romp with a buxom woman of questionable virtue to get the results from the free clinic.



They get the bike of their dreams and all is right in the world. Until the "real" bill comes and the bike's novelty has worn off like the paint on Richard Simmon's knee pads. But they learn this fiscal lesson (most of the time) and are wiser the next time around.



Best we can do is make damn sure our lust-driven friends have a clue before they venture into the dens of inequity that are most dealerships.

 

[Pinkslip]

What kills me is the depreciation I faced after buying my new Honda 600 a few years back. The second I left the dealer with it, I lost several thousand dollars.



Look at the 99-03 Mille or the 954rr: Two (extreme) examples of bikes that dropped in value by 50% almost over night!



I'll probably never buy new again.

 

[kpaul]

You point out a good fact of life. Some say that the only way to get your money out of a new Big 4 sportbike is to keep and run it till it dies.... I am torn between trading my 01 Ninja in on a new one 05 or keeping it for a track bike....

 

[cruiz-euro]

This is gospel truth

So bloody true, both of the posts. Get this straight and you are already 50% winner: its so much better to have some cash in the pocket. Drive cheap & cheerful, do those overnighters and weekenders and HAVE FUN.

And even the posing value. It is true that flashy machine attracts, but only some and even them only somewhat. But you do more, if you know what I mean, if you got the dough to take the chicas to places.

- cruiz-euro

 

[33129]

Depends on how well you manage debt and how well you "invest". Most of the time the asset is depreciating in value. As a "fun" purchase, who but you can tell you what makes you happy? If you don't want to be seen on a used pile, don't buy one. If you are a wise investor who likes to ride, purchase something as it is about to rebound in it's worth. Takes a bit of a crystal ball. If you are investing, there is nothing wrong and a whole lot right with the use of debt. For you kiddies out there just getting started in the cash management side of life, do pay attention to maladg. There is wisdom those words. But there are other, controllable options too.

 

[Abe_Froman]

The optimists placing ads for their bikes in Cycle Trader don't seem to agree with your depriciation table (I do). Then they think you're insulting them if you come back with a realistic price for a 2 year old literbike with 5,000 miles on it. It's ludicrous to pay someone $8000 for this when new bikes in the fall are selling for less than $9000, sometimes closer to $8000.

 

[christian_gates]

I've always figured that when you buy a sportbike, you're not going to get any financial value out of it on the back end. They are too fragile, maintenance intensive etc. to be worth much used.



I still have my '00 F4 and actually ride it a lot, even though I don't need two bikes - because it's insane to turn around and sell it for the $2K or so it's probabl worth.



cdg

 

[cruiz-euro]

I would say you have learned the lesson. Let some other hapless loser to eat the initial loss.



- cruiz-euro

 

[kpaul]

Sure yes you can use debt in a business situation to increase your return on investment. i.e. use someone elses money to make a higher return than what you have to pay back. The airline industry is like that i.e hiighly leveraged. Trouble is if time get tough the bill is still due. Personal debt is something to minimize I think.