Buy outright or finance?

[neels]

Finance sucks, buy something you can afford to pay cash for. In fact, buy something cheap for shits and giggles while you save to buy what you really want.

Non of this applies if you have a mortgage, if you do you should have paid the money off your mortgage so you're paying interest anyway, for the next 20 or so years.

[Zamiam]

If you want something and can handle the repayments then FFS go out and buy it. You're a long time dead and should your circumstances change hopefully you can sell it for more than the balance outstanding. As for paying twice the price of the item, bullshit. Even if you borrowed 100% at credit card rates you;d have to take the loan out over more thn five years or so to pay the same amount of interest as the principle borrowed.

It's a really simply equation. If enjoyment factor is worth more to you than the interest bill, then go for it. It you smoke then give up the ciggies and the chances are you'll save more than the interest, if you don't smoke then say to yourself, if I did I'd be spending $100 or so a week on ciggies so the interest is a cheap vice.

All you play it safer's are either Honda riders or need to start taking the bus. Lifes to be lived NOT saved for!

[Gremlin]

Never, never borrow money to pay for a depreciating asset.


Never.

This chappie ended the thread for me... Not sure if it's an asset though... Might be a liability as they're excellent at making spare cash disappear in a myriad of ways...

[Spazman727]

All great advice, thank you. Most of it echoing what I initially thought. I will have a look around at finance options but, unless im able to sell my shitty car for more than I expect, I will probably be sticking with the CBX for a year or so yet.

[rossirep]

all the old guys say pay cash and dont tick it up.
but i say fuck it, tick it up cause ya only live once and just pay it off as fast as ya can ;-)

[jrandom]

Never, never borrow money to pay for a depreciating asset.

... unless it's a really awesome depreciating asset, and you can pay it off fast. Like, a year or so. Because life isn't all about the balance sheet. And because sometimes, having something brand new that's all yours can be special.

Someone's already said, if you borrow to buy you end up paying twice the price.
And that's conservative.

Nawwwww... I'm taking the above approach to my current bike. The cost of getting it for myself last Christmas and financing the majority of it, vs saving for a year or so and then getting it, adds about 20% to the purchase price.

In exchange for that 20%, I get to have the bike all this year.

I don't think I'm gonna die regretting that expenditure. I've done some pretty sweet miles on it. It's probably less money than I spend on whisky of a year.

I do agree that if your only way of affording a given bike is to finance it over multiple years, you need to accept reality and downgrade your expectations.

There's not much the newer ones can do that the older ones can't.

Starting every time without fail and being wear-induced-gremlin free, a year or two of manufacturer's warranty, and pretty much being able to guarantee the nature and interval of servicing and part replacement over the next 50,000km or so is important to some people. Like me. Particularly when the bike in question isn't just a secondary or tertiary vehicle / toy.

[clonak]

I had 10k in a term deposit with the bank, for safe keeping so I stoped spending it to drugs whores and booze. Borrowed $5k from the bank to buy my car, secured it against the term deposit, with an interest rate of 5.75% on a year long term. Had it paid off in 9 months. Paid $250 in interest. Why didnt I just buy it out right ? Because I still have that $10k invested at 3%, earning back the interest I paid the bank. I wouldnt be able to save that up again for a long time, yet debt I throw as much as I can at it to get it paid off faster. If my situation changed, I had payment insurance at like $3 a week or something to take over payments, or the money was still there to pay it off. Also H-P'd my washing machine, dryer and fridge, 30 months interest free deffered payments, had it paid off in less then a year.

Now this might not be your situation, but finance isnt the big bad devil everyone trys to make out it is. If you can use it properly, it can work in your favour. Its people that over extend them selfs that makes it look bad. But, if you already have a bike, and it works fine right now, there probably isnt a need to tick it up. I buy my bikes off cash savings. End of the week, what ever cash I have left in my walet, goes into a tin. When I have enough, I go buy a new bike.

End of the day, If you want it, buy it. F*** what everyone else says. They are just jelous you are in a situation that you can do it. It looks good on your application for a morgtage as well. As long as you didnt balls it up. :P

[Maha]

Never, never borrow money to pay for a depreciating asset.


Never.

depreciating asset?...now theres an oxymoron!
My bike was worth $2000 less in the space of a day, because it had 800kms ticked up by the dealer, who took it around that Coro thing.
Not a asset.

[Akzle]

make the most of this bullshit debt system: sell yourself to the bank! (borrow as much money as you can and buy a nice shiny bike)

[ktm84mxc]

There's a few simple rules I follow when financing a car/bike, 1st work out what you can afford a month in repayments, 2nd maximum term 36 mths otherwise the interest will hurt, 3rd work out what you want to buy and stick to a budget, 4th factor in insurance and rego costs over the term as these will affect your out goings, 6th once you've found the bike/car of your dreams stick to the large finance companies or do a simple maths trick add up the repayments minus the amount borrowed quoted to see how much interest you'll pay , anymore then a 1/3 in interest walk away. 7th be willing to wait for the right bike/car to come along it always will[murphy's law].

[Maki]

Never, never borrow money to pay for a depreciating asset.


Never.

What??? Is that you darling? That is EXACTLY what my wife says. I don't think she is on KiwiBiker so it can't be her.

[Hobbyhorse]

I recently bought a bike that had the original finance documents included in the paperwork I received to show that the bike was unencumbered. The new price was $12,100, the deposit paid was $1300 and the payments ran for four years. The total paid for the bike on completion of the term was $19,200. Bloody expensive!!

Rhys

[Banditbandit]

Never, never borrow money to pay for a depreciating asset.


Never.

A motorcycle is an asset? Yeah right ... if you see it that way what the fuck are you doing on one? Saving money ?

To get a motorcycle I have:

Paid cash
Taken vehicle finance
Extended the mortgage


I want that bike more than paying interest pisses me off ...

But if you take finance try to pay it off as fast as possible - set up the repayment schedule and meet it .. but any unexpected or silly money or lump sums that come your way over and above what you earn, bump it all on the bike ... I have always paid off the bikes well before the repayment dates .. saves a shit load of interest.

[neels]

I have always paid off the bikes well before the repayment dates .. saves a shit load of interest.

True, but but check the contract.

I was going to finance part of the purchase price for a cheap car until I sold the old one, read through the whole contract and found that there was a $400 up front fee, and a penalty of 50% of unpaid interest for early repayment. It was only financing a couple of grand, but the standard contract was for a 3 year term, worked out cheaper to get a cash advance on the credit card at 20% and pay it off asap.

[p.dath]

I'm with everyone else, save and buy it. It might be a different story if you needed it to get to work and had no other transport, but it is is just for fun then wait.

Something I also like to do to is get the monthly payment, multiple it by the number of months, and then look at the total repayments. It can be shocking how much extra you pay sometimes.