How do you buy your bike?

[The Stranger:Me]

You don't get the Dijon mustard link? Dijon vous? Meh, nevermind.

What the fuck?
Poncey bastard, you need a good bitch slap just for knowing that. Real men don't know that shit, nor should they.
It's yellow and comes out of a squeeze bottle in the fridge for fuck sake, that's all you need to know.

[samgab]

What the fuck?
Poncey bastard, you need a good bitch slap just for knowing that. Real men don't know that shit, nor should they.
It's yellow and comes out of a squeeze bottle in the fridge for fuck sake, that's all you need to know.

I lol'd . Oh, and it might not even be what Mully meant...

[Slyer]

Its going to be a while till I'm rich enough to buy everything cash...
Just starting out flatting, a lot of expenses coming my way.

[rat biker 08]

Mine was free and cost me $200 to get going it,s old but go,s real good

[discotex]

Remind me again how cash is FTW.

The only way your scenario pans out is if you could have afforded to pay cash for the older bike (say $10k) and you just borrow the top-up amount (say another $5k) over a short term like 12mths. Even then you're only saving against risk of the old bike having issues. Checking the history of the older bike could have been equally effective.

I think you'll find I covered the fact there are special circumstances already when I said borrow no more than half the value. Finance *can* be used strategically if you crunch the numbers. It's just that most kiwis have no clue when it comes to managing debt or investing - although the poll results show KBers have a better idea than the average.

Full finance on a $15k bike over 3 years will cost a shit load more than $1000 in interest and will leave you down around $125 EVERY week.

Anyone thinking of financing anything should use the Sorted calculator first - http://www.sorted.org.nz/calculators/hire-purchase/

[Dean]

Just curious. How do you guys pay for your bike?

how do i pay for my bike....a little thing called parents i purchased them in 1989 now they feed me clothe me and buy me motorcycles they come with a lifetime warranty so i can take them back when i like.

[MotoGirl]

It's nice to pay cash for things but you also need to consider:

• How long it will take to save for the bike you really want. If I wanted to buy a new RSVR (they're about $26,000) and was only capable of saving $100 a week, it'd take me five years to save up for it. Gee, I wonder if the bike would still be available when I've finally got the cash?
• What you're prepared to pay for the pleasure of having your dream bike sitting in your garage versus getting sad every time you see one because you can't afford it yet.
• Whether you want to get a credit rating. My cousin earned over $60,000pa and had NO debt, and she couldn't even get a $5,000 loan because she'd always paid cash for everything.
• Whether you have the willpower to save the money, or whether you are at risk of wasting it on other things. I wouldn't have the patience to spend five years saving for something and I'd probably spend the money on something else.

I paid cash for the RSVR (and sacrificed a trip to Japan to have it) but I have financed things in the past through personal loans. My rationale was that I can afford to have things right now and any interest is small compared to the enjoyment I get out of having that item. Plus, where you can get things interest free, the money sitting in my bank account accruing interest can work out to a greater amount than any discount I would've got by paying cash.

As a side note, I do realise that KB has people in a diverse range of income brackets. I would be interested to know whether a particular group is more inclined to pay cash than another?

[Slyer]

Buy an older smaller capacity bike with cash and have fun riding and not having to pay interest.

[The Stranger:Me]

The only way your scenario pans out is if you could have afforded to pay cash for the older bike (say $10k) and you just borrow the top-up amount (say another $5k) over a short term like 12mths. Even then you're only saving against risk of the old bike having issues. Checking the history of the older bike could have been equally effective.

I think you'll find I covered the fact there are special circumstances already when I said borrow no more than half the value. Finance *can* be used strategically if you crunch the numbers. It's just that most kiwis have no clue when it comes to managing debt or investing - although the poll results show KBers have a better idea than the average.

Full finance on a $15k bike over 3 years will cost a shit load more than $1000 in interest and will leave you down around $125 EVERY week.

Anyone thinking of financing anything should use the Sorted calculator first - http://www.sorted.org.nz/calculators/hire-purchase/

Well, sure it was re a top up loan. I compared 2 scenarios. What you could afford to buy outright V what you could afford to borrow. So the full finance option is not really relavent to the example I gave.

However according to your link 5k over 36 months at 10% (was easily available from YMF not long ago) is only $791.07. Cheaper than a set of front disks on some bikes.

So no need for special circumstances, simple economics suggests that you are better off to borrow a top up if it will mean the difference between an older/higher milage bike and a newer lower milage one.
Though it is not hard to see where special circumstances would mean it is economically viable to borrow the lot.

[discotex]

It's nice to pay cash for things but you also need to consider:
[*] How long it will take to save for the bike you really want. If I wanted to buy a new RSVR (they're about $26,000) and was only capable of saving $100 a week, it'd take me five years to save up for it. Gee, I wonder if the bike would still be available when I've finally got the cash?

Even at a low 10% interest you'd need a 6 year plan to get anywhere near close to $100/wk repayments. And you'd pay over 8k in interest over that period.

[*] What you're prepared to pay for the pleasure of having your dream bike sitting in your garage versus getting sad every time you see one because you can't afford it yet.

Yep and vs having a bike that you can't sell for enough to pay back the debt and pining over the latest and greatest that came out 2 years after you got your "dream" bike.

[*] Whether you want to get a credit rating. My cousin earned over $60,000pa and had NO debt, and she couldn't even get a $5,000 loan because she'd always paid cash for everything.

NZ doesn't have a positive rating system like the US so you can't rack up a positive credit rating by borrowing.

You can however get a reference from a previous creditor. The days of needing that might be coming back. So yeah, finance a $500-1000 item on a no-interest deferred payments deal to prove you can do it. Or get a credit card with a small limit ($2k max) and pay the balance every month.

[*] Whether you have the willpower to save the money, or whether you are at risk of wasting it on other things. I wouldn't have the patience to spend five years saving for something and I'd probably spend the money on something else.

You sound like me which means you'll also probably wish you weren't stuck paying off something for 5 years when your tastes/wants change.

I paid cash for the RSVR (and sacrificed a trip to Japan to have it) but I have financed things in the past through personal loans. My rationale was that I can afford to have things right now and any interest is small compared to the enjoyment I get out of having that item. Plus, where you can get things interest free, the money sitting in my bank account accruing interest can work out to a greater amount than any discount I would've got by paying cash.

You sound like the kind of person who has the wit to make a rational decision about what the costs are vs the rewards and knows how to use finance safely.

[The Stranger:Me]

Buy an older smaller capacity bike with cash and have fun riding and not having to pay interest.

Either way you pay.
You pay interest or you pay repairs - sure there are exceptions, that is expected, however, in general that is correct, older bikes need more maintenence.
But one way you get a newer nicer bike to ride.
See if you can figure out which way.

[discotex]

Well, sure it was re a top up loan. I compared 2 scenarios. What you could afford to buy outright V what you could afford to borrow. So the full finance option is not really relavent to the example I gave.

You never mentioned it was a top up deal which is why I cleared it up.

However according to your link 5k over 36 months at 10% (was easily available from YMF not long ago) is only $791.07. Cheaper than a set of front disks on some bikes.

So no need for special circumstances, simple economics suggests that you are better off to borrow a top up if it will mean the difference between an older/higher milage bike and a newer lower milage one.

That's not economics. That's risk management. You could buy the older bike from a dealer and pay for a warranty instead. Or get someone like yourself to check it out.

Unless you buy brand new you'll always have the issue of not knowing how the bike was treated. A bike with 12000km could have been thrashed vs a bike at 36000 could have been loved tenderly.

Like I said there *are* circumstances where it works in your favour but most people who finance aren't doing it for those reasons and don't have a clue how to decide on the numbers.

Though it is not hard to see where special circumstances would mean it is economically viable to borrow the lot.

Exactly... Possible but very uncommon.

Therefore cash FTW. QED.


EDIT: And don't forget in your example we're excluding the opportunity lost on the $5k that's going on a slightly newer bike and excluding the loss on resale value due to depreciation.

[The Stranger:Me]

That's not economics. That's risk management. You could buy the older bike from a dealer and pay for a warranty instead. Or get someone like yourself to check it out.

No what you suggest (attempting to second guess the condition of a bike) is risk management. If you look at it on a balance of probability (i.e second hand bikes cost more in maintenence period) it becomes economics.
Reality is You "may" get a good un, well done, but where do all the POS bikes go?
They are still out there and people still buy them, therefore the maintenence costs are still being expended by someone somewhere.

But hey, what would I know?
Someone has to buy my high milage slightly worn second hand bikes and the bigger the market the better - for me so

[discotex]

No what you suggest (attempting to second guess the condition of a bike) is risk management. If you look at it on a balance of probability (i.e second hand bikes cost more in maintenence period) it becomes economics.

As soon as you're talking probability you're talking risk management and are in effect using finance to buy new as a form of insurance (that actually offers no more cover compared to buying a dealer warranty on a 2yr old 2nd hand bike).

Don't get me wrong - I do think there will be times that it makes sense to spend a little more to save in the long run. It's exactly why I got a brand new 600rr over a second hand bike. But I paid a premium for peace of mind and I'm glad I'm not paying interest on top of that.

Reality is You "may" get a good un, well done, but where do all the POS bikes go?
They are still out there and people still buy them, therefore the maintenence costs are still being expended by someone somewhere.

To be fair I don't think there's that many POS bikes out there and they're usually dead easy to spot if you know a little about bikes. Most bikes don't need any major work until 50,000km if they have a good service history which is easy to check.

But hey, what would I know?

Huh? You started this debate by ripping into my post.... I've already conceded you have a valid point in *some* circumstances even though I consider it is usually a false economy.

Can you at least agree to this?:

That from a purely financial perspective if you have the cash it is always better to pay cash or buy a cheaper brand new bike within your budget rather than finance your dream bike.

[Dean]

No what you suggest (attempting to second guess the condition of a bike) is risk management. If you look at it on a balance of probability (i.e second hand bikes cost more in maintenence period) it becomes economics.
Reality is You "may" get a good un, well done, but where do all the POS bikes go?
They are still out there and people still buy them, therefore the maintenence costs are still being expended by someone somewhere.

But hey, what would I know?
Someone has to buy my high milage slightly worn second hand bikes and the bigger the market the better - for me so

i say the stranger wins discotex got owned in this debate/argument but discotex your the man to.actually you both win because your both the man or mans