Buying new bike - cash vs finance?

[chocobo_ff]

I'm finalising my new bike purchase soon, probably going to have a chat to the local dealer tomorrow to see if I can get them to drop the price a bit (for a brand new bike)... I've been reading and lots of people here (for example, this thread (http://www.kiwibiker.co.nz/forums/showthread.php?t=51627)) say that paying cash will usually get you a better deal which I agree, but was reading on the net and some American websites seem to suggest that finance is actually better for the dealer, because they get paid upfront anyway, and you have to pay more overall, i.e. they get more than if you paid cash... is this true or am I better off with cash? I personally prefer paying by cash because personally, I feel that if I need to finance, I can't afford it now and should wait a bit longer (the only exception for me would be buying a house).

Oh and I don't plan on letting them make a lose, I think dealers deserve to make a profit, especially one that has good service, but it's always nice to get a better price than retail...

P.S. more info on the new bike when I've decided which of the two I want to get! :bleh:

[Hiflyer]

I'm finalising my new bike purchase soon, probably going to have a chat to the local dealer tomorrow to see if I can get them to drop the price a bit (for a brand new bike)... I've been reading and lots of people here (for example, this thread (http://www.kiwibiker.co.nz/forums/showthread.php?t=51627)) say that paying cash will usually get you a better deal which I agree, but was reading on the net and some American websites seem to suggest that finance is actually better for the dealer, because they get paid upfront anyway, and you have to pay more overall, i.e. they get more than if you paid cash... is this true or am I better off with cash? I personally prefer paying by cash because personally, I feel that if I need to finance, I can't afford it now and should wait a bit longer (the only exception for me would be buying a house).

Oh and I don't plan on letting them make a lose, I think dealers deserve to make a profit, especially one that has good service, but it's always nice to get a better price than retail...

P.S. more info on the new bike when I've decided which of the two I want to get! :bleh:

If you want finance and cash, get a personal loan with (as low as you can get) low intrest rates. That way you get cash in hand to wave around and the instant money.

Why bother saving 70 buks a week when you can put it on a loan?

On the other hand if you forget to transfer $70 to your savingsyou dont get a $25 fee and you dont have to pay interest.

In my case I used to work in a bank so I took the staff rate loan and some of my cash to the dealer and got a nice wee deal. Haven't regretted it at all.

But yea theres both sides of the coin.

Instant with fees and extra interest if you arent careful vs no fees but a long wait.

[Hiflyer]

But I see you have a bike already so maybe saving is the best option

[AllanB]

Get into it whatever way you are comfortable with.

I see a few dealers with very good finance rates (thought I say a zero for 12 months somewhere recently). Times are tough for them, if you need to borrow a few grand to get into the bike you really want then go for it.

All dealers will sit down and work out finance costs etc for you so you'll know exactly what it will cost you (ie you have $10k cash and need another $4k - they will work out the cost of that $4 per week, month etc). If they are a bit busy leave your number and tell them to call you tomorrow with the figures.
If they won't make the effort to do that then take your $ somewhere else.

Also if you are do a bit of finance ring around and see what other rates are available at your bank, PO, AA etc.

And most importantly - what are you interested in getting :niceone:

[chocobo_ff]

Get into it whatever way you are comfortable with.

I see a few dealers with very good finance rates (thought I say a zero for 12 months somewhere recently). Times are tough for them, if you need to borrow a few grand to get into the bike you really want then go for it.

All dealers will sit down and work out finance costs etc for you so you'll know exactly what it will cost you (ie you have $10k cash and need another $4k - they will work out the cost of that $4 per week, month etc). If they are a bit busy leave your number and tell them to call you tomorrow with the figures.
If they won't make the effort to do that then take your $ somewhere else.

Also if you are do a bit of finance ring around and see what other rates are available at your bank, PO, AA etc.
Hmm alright let me make the question more clear... I have the money to buy the bike outright, what I'd like to know is whether paying cash is a powerful tool to bargain with the dealer or is that some urban myth?



And most importantly - what are you interested in getting :niceone:
Something very nice I think :niceone:

[Pussy]

As mentioned above, dealers make more when it's financed, so they are more likely to move a bit when the bike is hp'd

[Hiflyer]

Hmm alright let me make the question more clear... I have the money to buy the bike outright, what I'd like to know is whether paying cash is a powerful tool to bargain with the dealer or is that some urban myth?


Something very nice I think :niceone:

PAY CASH! definately haha its not an urban myth, some dealers are more generous than others but cash in hand = good in my experience

[chocobo_ff]

As mentioned above, dealers make more when it's financed, so they are more likely to move a bit when the bike is hp'd

But do they get the whole amount upfront if you financed (either through them or a bank), or do they get it in instalments?

[Pussy]

But do they get the whole amount upfront if you financed (either through them or a bank), or do they get it in instalments?

I'm pretty certain they get the lot up front.
There are several dealers on KB... with any luck one of them will give the answer

[chocobo_ff]

I'm pretty certain they get the lot up front.
There are several dealers on KB... with any luck one of them will give the answer

Yeah that's the impression I got after doing a bit of research on the net, that's why I wanted to double check because just about everyone tells you paying cash is better, but if they get the whole lot up front, then financing is a lot better for them...

[grusomhat]

Just work it out. I'm sure any extra discount you get for paying with finance will be negated by interest payments. If they are going to give you a bigger discount because of finance (as they will get more) then obviously you are the one giving them that extra.

Pay cash and get a good discount and then ask for a helmet or something and a permanent in store discount.

With the economy the way it is, saved money in the bank isn't going to be doing an awful lot so paying cash isn't going to be a huge loss.

What's the new bike?

[Hiflyer]

Fair enough, the finance company migth pay it all upfront, but would that include the interest that you would pay the company?

I doubt it cos then the company wouldnt make much of a profit.

So whats the difference between the finance company paying up 5k or the customer paying 5k?

(just thought I'd throw a spanner in there :P)

[chocobo_ff]

Just work it out. I'm sure any extra discount you get for paying with finance will be negated by interest payments. If they are going to give you a bigger discount because of finance (as they will get more) then obviously you are the one giving them that extra.

Pay cash and get a good discount and then ask for a helmet or something and a permanent in store discount.

With the economy the way it is, saved money in the bank isn't going to be doing an awful lot so paying cash isn't going to be a huge loss.
That's true, I'll have to do my homework tonight, but probably go with the cash route.


What's the new bike?
I'll say this much: it's either a three or four cylinder :niceone: (still trying to decide between two very nice bikes even though I'll most likely be buying sometime this week!)

[chocobo_ff]

Fair enough, the finance company migth pay it all upfront, but would that include the interest that you would pay the company?

I doubt it cos then the company wouldnt make much of a profit.

So whats the difference between the finance company paying up 5k or the customer paying 5k?

(just thought I'd throw a spanner in there :P)

Very interested in this as well...

[Devil]

Hmm alright let me make the question more clear... I have the money to buy the bike outright, what I'd like to know is whether paying cash is a powerful tool to bargain with the dealer or is that some urban myth?
You wont get any significant discount paying cash rather than finance, as stated they get the money straight away anyway.

What you should work out is interest costs on a finance deal vs what your current cash could be doing were it invested (to whatever risk you feel comfortable).
I suspect in these times the interest earned at the moment would be less than the interest charged on the loan, so just going and buying it cash would probably be better for you.

[bogan]

If you pay the dealer cash up-front, all your money goes to the dealer, if you involve a finance company or something, they get some of your money, so either the dealer gets less or you pay more. Better to pay the dealer direct me thinks, and ask for a cash discount ;) .

[Pussy]

If you pay the dealer cash up-front, all your money goes to the dealer, if you involve a finance company or something, they get some of your money, so either the dealer gets less or you pay more. Better to pay the dealer direct me thinks, and ask for a cash discount ;) .

The dealer gets commission on the finance.
E.g you may be charged 10% interest... the dealer probably "buys" the finance for 8% interest. The dealer gets the sticker price

[chocobo_ff]

So the bottom line is, I'll probably pay about the same either I finance or pay cash, and even if I save a few dollars by paying one way or another, it's not worth the headache figuring all these out? :laugh:

[Pussy]

So the bottom line is, I'll probably pay about the same either I finance or pay cash, and even if I save a few dollars by paying one way or another, it's not worth the headache figuring all these out? :laugh:
At the end of the day....

life is short, get the bike you want WHEN you want, and enjoy it!
Pics please!

[chocobo_ff]

At the end of the day....

life is short, get the bike you want WHEN you want, and enjoy it!
Sounds like a plan, I'm going to go worry about how I'm going to enjoy my bike instead now, thanks for the useful info! :niceone:


Pics please!
Will have pics hopefully by the end of the week :bleh:

[Mully]

Depends on the finance rate you can get.

IIRC, Honda are offering 0% for 2 years. You could chuck your money in an interest bearing term deposit for 2 years and pay the bike off at the end of it.

Of course, that's Honda. YMF may be offering a similar deal

[YellowDog]

There are some great deals around at the moment; both on finance as well as for cash.

Find the best price you can get and then go to the dealer you want to service the bike and ask them to match the price.

You will normally get the best deals on bikes they already have in stock.

Regarding finance and cash, that's your call. I usually avoid finance unless it's really cheap however don't leave yourself skint.