Should I Finance a Motorcycle?

What is happening ladies and gents? Today I want to address a lot of recent comments by answering the question Should I Finance a Motorcycle? By far one of the most requested topics on the channel, so let’s discuss motorcycle financing and whether or not you should finance a motorcycle. Pros and cons of financing a motorcycle, here we go!

Should you finance a motorcycle short answer probably not long answer maybe stick around for a few minutes and i’ll explain myself what’s up everyone its alex so lately overwhelmingly some of the questions i’ve been getting more than anything else are pertaining to motorcycle financing for some reason i’ve done videos on this in the past a lot of these questions

Are actually on those videos so i decided what i would do for you guys is i’m just gonna shoot a whole new motorcycle financing little miniseries where i get really really in-depth and down the rabbit hole on motorcycle financing should you do it should you not do it and then i’m going to do a couple of videos on some topics related to that and by far one of

The most requested things is doing some examples on a good deal versus a bad deal when it comes to financing a motorcycle so i’m going to get into some of that too right but first things first we have to cover a topic of should you even finance a motorcycle because it’s amazing how many questions i get from people that pertain to should they even finance the

Motorcycle now we’re i’m going to say right off the bat is if you are thinking about it and you have the money you don’t have to finance a motorcycle if you can just pay for the motorcycle you want outright without financing you should probably do that that is definitely the best option for most people that being said let’s get into should you or should you not

Find some motorcycle as i see it so i’m gonna start off by telling you guys when i bought the continental gt i actually did finance a very small amount of that bike and i’m going to tell you why as the video goes on so just for starters and this is going to be a little bit basic so for those of you that already know this you know just bear with me for a minute but

For all my new people when you finance a motorcycle obviously you are not paying for it all upfront you are making monthly payments on that motorcycle right you are also paying interest along with those payments so if you finance a motorcycle and you actually pay for it for the whole two three four years however long you finance it you are in the long run paying

More for that motorcycle because of the interest i just want to make that clear in case anyone doesn’t get that concept you finance a motorcycle you might be looking at oh instead of paying $8,000 right now i’m paying $140 a month yes but in the grand scheme of things in the long run you will end up paying considerably more total for the motorcycle because you’re

Paying interest had to get that out there in case someone doesn’t understand that the rest of this will make no sense if you don’t understand that so the way i see it from the perspective of someone who sold motorcycles for 13 years and financed a lot of people on motorcycles and did a lot of cash deals on motorcycles here’s when you should or should not find some

Motorcycle if you are looking at a used motorcycle and you have the money to pay for it you can comfortably afford to just pay for it just pay for the motorcycle okay you’re not really going to gain anything from doing financing on it and keeping the money in the bank because you’re just going to pay more in the long run the only situation where i can see this is

Like the same situation i was in with my continental gt is i didn’t really have anything as a as a loan at the time and i wanted to keep my credit rolling and keep it building and unfortunately the way credit works in the u.s. if you just stopped taking loans and you just don’t have any credit out there you just don’t have anything that you’re paying for on credit

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A lot of times that’ll actually end up hurting you after a while so i usually have just one small thing whether it’s installment or revolving i always usually have just like one small thing that i can very easily and comfortably afford to pay on that i just keep rolling and keep paying on just to keep my credit running or keep it fresh so to speak because i have

Really good credit at this point i just want to keep that going in case you know i want to buy a bigger house at some point of something on my knee credit for so on used motorcycles if you absolutely can pay for it i would pay for it if you’re in a situation where you have good credit you just need something small to keep on your credit then you know put half

Down or more than that finance the rest just to keep something going but if you’re in that kind of situation you already understand credit and i understand financing we’ll have to make that decision on your own generally speaking on new motorcycles i see a lot more people finance a new motorcycle than a used motorcycle because they are more expensive here’s what

I would say to you on that point if you are looking at new motorcycles and you cannot afford to buy it because of the overall dollar amount first i would see if there is a used motorcycle of the same thing or the same category that’s a lot cheaper that you can maybe pay cash for because if you can just pay cash for the used motorcycle the same segment or the same

Bike or whatever that’s in good shape you’re going to get just as much pleasure from riding that used motorcycle without having the interest and all the extra long-term cost of the financing so if you’re looking at new and you’re only thinking about financing because you want that new bike see if maybe there’s a nice used one in the same category to save you from

Having to spend all that interest if you just can’t find one there’s just not a use motorcycle out there in that category or this is just your dream bike like you’ve already had a couple of bikes this is the motorcycle of your dreams you know you can very very comfortably afford your monthly payment but you just cannot shell out that total amount of money right

Now i think it’s okay to go ahead and finance it but you have to make that decision for yourself i can’t make that decision for you i would never finance a motorcycle new or used if you’re gonna struggle to make a payment don’t do that and unfortunately most of the people watching this video that are trying to decide between financing their cycle a lot of times if

You have to finance the motorcycle because you can’t afford it you’re also probably going to struggle a little bit to make those payments you know generally speaking saying you’re looking at a used motorcycle that’s six thousand dollars and you’ve been able to save up three thousand dollars it will usually be smarter for you to deploy a little bit of patience and

Save up the rest of the money over a period of time and just pay cash for it so you don’t have to worry about the interest rate you don’t have to worry about you know god forbid a car backs over your motorcycle in a parking lot and smashes it in total is your motorcycle you don’t have to worry about paying back the finance company for the rest of the motorcycle is

Now smashed or something like that you know it’s just much better for your peace of mind in the long run if you can save up the money and be patient a little bit and pay cash for the bike you’re looking at you will i think be happier in the long run with that if you can’t be that patient and you just want it now but you can’t really pay for it it’s still probably a

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Bad situation because you’re you’re probably going to get yourself into the the situation where you’re having trouble paying that monthly payment still so no matter how you slice it really unused motorcycles used especially i think it you can afford to pay for it you need to pay for it if you can’t afford to pay for it you probably need to deploy some patience and

Save up some more money and still try and just pay cash for it or see if you can find the same bike a couple years older that’s a little bit cheaper or something like that see if you can find something else in that category that you’d be happy with find something you can ride and enjoy in the mean time that you can afford to get i guess the big message here is you

Need to ride when you can afford to ride different people are in different financial situations but we all love to ride and there are a lot of bikes out there in every price category that can keep you happy without having to pay interest on them and worry about financing them okay so if you can absolutely help it i think you should avoid financing a motorcycle and

For those of us that like to ride fancy more expensive things that can be tough you know i said i financed a small amount of my continental gt to keep something rolling but when i say a small amount i mean i paid all but about $2,000 of the thing cash and i just finding it’s just that little tiny bit so i have just a little tiny monthly payment on it just keep some

Credit rolling for me but that’s a little bit more of a more advanced credit concept we’re just trying to cover the should you or should you not and i’m going to say in 90 plus percent of cases i don’t recommend financing a motorcycle at the end of the day i know it’s our life and it’s our afterlife as it is our transportation and it really is more than a toy but

As far as the financial system goes they see it as a luxury item as a recreational item so financing on motorcycles your interest rates just naturally are going to be higher than they would be on a car a lot of things and the terms usually just are not going to be as good as they would be buying you know a house or a car that you have to have because from a bank

Standpoint from a financial standpoint credit unions etc it’s it’s a want not a need okay so if at all possible i don’t recommend financing one i have financed several of them so i’m speaking from experience i have helped a lot of people get financed on them for the most part if it was someone that could pay half the motorcycle down and could comfortably super

Easily afford their payments then hey no problem but those people usually pay them off early anyway just to get so they weren’t locked into a loan most the people that i have helped buy a motorcycle that had to fire that had to finance it because they really could not afford that motorcycle cash and did not have a lot to put down a lot of them have struggled to

Make the payments so if at all possible use a little bit of patience save up the cash pay cash for your motorcycle if you absolutely possibly can and don’t get trapped being a slave to the payment now you want to use motorcycle you want the bike of your dreams you have a good chunk of cash down you can very very easily afford the payment and you just don’t want to

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Spend the cash go ahead and finance the motorcycle make sure you’re getting good terms i’m going to cover that in probably the next video okay but the only situations where i think it is perfectly fine to fight it’s a motorcycle or if you’re looking at something brand new you just do not have the cash for it or you just need to have something else on your credit i

Think you need to pay a really good chunk down so that you’re in a good value equation as far as your loan goes and that’s a more advanced concept to but you need to pay a good chunk of money down and you need to make sure that you are in a payment that it is not gonna worry you at all to make even if you were to lose your job or something okay and most people that

Are in the situation to put a good chunk down and are not gonna worry about the payment at all probably could just pay cash if they really wanted to so most of the time ironically that i think that it’s a okay idea to finance it those are usually people that don’t even need to finance it to begin with and they probably already know enough to make that decision so

The vast majority of you i just don’t recommend it when i sold motorcycles probably sixty or seventy percent of people that were buying them were financing them we did our absolute best to get them good terms and to get them very comfortable payments i even shot myself in the foot on a lot of deals telling people hey you know your payment’s gonna be three hundred

Ollars a month and you’re gonna struggle to make that maybe this isn’t the right bike for you maybe we need to go pick you out a three thousand dollar used motorcycle for now until you’re in a better situation to afford a more expensive bike and nine times out of ten those people wouldn’t listen to me because they wanted the crazy newer more shiny fancier motorcycle

But sometimes if you just switch over to a cheaper motorcycle that you can actually afford you’re gonna enjoy riding it more because you’re just not worried about it you know does that make any sense i know this has been a little bit more of just like a all over the place discussion with you guys but i want you to understand from an honest standpoint why i think

The way i do about financing a motorcycle just to summarize real basically whether or not to finance a motorcycle i think that if at all possible you need to pick a motorcycle that you can afford to pay cash for if you cannot afford to pay cash for any motorcycle then i don’t think you can afford to finance one either i think you need to be patient and save up

Some more for your motorcycle if you want to find some motorcycle just to keep something on your credit or you know just for whatever then you probably know enough to make that decision without my input anyway so that’s it i hope that clarifies whether or not i think you should finance a motorcycle if not put your comments below i’ll make a separate video to

Answer that specific aspect of it in the next couple of videos i’m gonna cover like a good finance deal versus a bad finance deal if you’re gonna find some motorcycle how you need to go about it and what not to do and how to not get trapped by a crap finance deal okay so i’m like a whole little playlist for this and i’m gonna make it so you guys can just pick the

Topic you’re actually interested in but this is going to be a whole little series so next video is gonna be a lot more deep diving into how to do this and what to look for good versus bad all that kind stuff okay so i’m alex peace

Transcribed from video
Should I Finance a Motorcycle? By Alex Simmons