17 year old financing a new dirt bike?

[crf250rrider]

Hi, I am looking to get a new bike soon and would like to get a new 2012 crf250r. I am 17 years old and have had a job for over a year now. What I want to know is if its alright to finance a bike. The price of the bike OTD will be between $7000-$7300. I will put down what ever half the cost of the bike is so bewteen 3500-3700. I will still have $1500 in the bank for mods and savings. I just found out today that I can not get a loan even if I have my parents cosign with me because of my age (there credit score is about 800 by the way). So what I would have to do is get my parents to get a loan and then I pay them each month. The bank chargers an 8% intrest rate. My minum payment is around $100 per month but I will pay about $400 a month and will have it payed of by may 2012 at the latest. I work 20 hours a week so I make about $500 a month. My 2007 crf250r is going to need about $2000 worth of new parts soon so I figured I would just get a new bike which I have been wanting any ways and keep the 07 as a back up bike.

Does this sound like a good idea?

[Sierra_rider]

I'll never again finance a dirtbike. IMO buying used low hour bikes is the way to go, let someone else take the depreciation hit. If your finance it, your paying more than the bike is even worth. I pay cash for almost everything including cars.

[Windblown]

I'll never again finance a dirtbike. IMO buying used low hour bikes is the way to go, let someone else take the depreciation hit. If your finance it, your paying more than the bike is even worth. I pay cash for almost everything including cars.

+1

Borrow money for investments that appreciate when nessasary. Cash for anything that depreciates, especially toys.

[JayN]

never finance a toy

[dimetweaker]

financing dirt toys kinda sucks. the minute you roll it out of the dealer, you are paying on a loan on a bike that loses a big chunk of its value the minute it hits your trailer. Not to mention, when you wad it up, you may have to make the payment on it instead of fix it, youre going to be pretty disappointed. save your money for a short time, get by without a bike if you have to, and pay for the thing. you will feel way better. financing cars and trucks is another story....

[trailmeisterjoe]

if you are putting 1/2 down and can pay it off by May...GO for it. the problems arise when you finance it over several years and end up paying waaay more for it. 7 or 8 months wont hurt anything . you work hard ( i assume) so this will teach you more responsibility and hard work paying off which in itself is a valuable lesson.

Joe

[Kliedus]

If you need to finance the bike, pay it off as quickly as possible. You say your going to pay $400/month, but only make $500/month. That leaves only $100 to live off of and ride. Use the 1500 saved for mods and put that towards the down payment of your brand new bike! It DOESN'T "need" $2000 worth of parts right away.

Or buy a used 250 out-right for cheaper, and use the saved money to put the aftermarket parts on. Not sure what they go for used.

[Hans Schmid]

I dont believe finacing is bad. There is really 2 kinds of debt, good debt (borrowing money to buy work boots for your new job) and bad debt (borrowing money for a dirtbike) and unfortantely a dirtbike is bad debt, especially at your young age. Though putting $3500 down on a bike and making more then the monthly payments is good, it wont help you in terms of improving your credit rating or showing you can make payments. Lenders want to see that you can make payments over a length of time, not paying them off in a short term. The reason is because one day you will want to buy a house and 99% of the world will never pay a house or vehicle off in a couple months. You will have to show a payment history. Also, your 17, you attention and prioritys will change over time and biking might not become as important as it once was and now your stuck with debt. IMO, take your 3500 and buy a 2010 Honda and put the 1500 into it. You will have virtually the same bike but with NO debt.

[choppertown]

dumb dumb dumb idea. on top of that you will need a co-signer.

toys should be payed out in full. with cash.

[J_Daniels]

Sounds like you are asking permission from us. In that case, no you can't.

Why the heck would you want to saddle your parents with debt for your bike? Forget that you are going to pay it off soon, you are going out on a limb for a toy which is gonna drop like a rock in value as soon as you wheel it out the door. You don't even need to fire it up for the first time and it's worth $2000 less than you just paid for it. As far as I'm concerned (and you did ask for opinions) new bikes are for rich guys. Something a year or three old with a few hours on it will work just as well for you.

Spend the money you DO have on a bike you can pay cash for. You won't have any less fun or have to fix it more often, you have enough to buy a really nice bike already.

[Erik Marquez]

My suggestion based on what you wrote... Wait till MAY 2012 and buy your new bike CASH..

.. Or sooner, as you will not be riding you can pick up extra shifts and save more, faster, and buy with cash sooner.

Never finance a dirt toy.. Street, sure if you have to, toy hauler, maybe.. Track bike perhaps, but never a dirt toy.

[gscx]

If your parents can afford to buy it with cash straight up and then agree to let you pay them back, then by all means go for it. Some people have money and some dont, just the way it is. I have done this before, not on something so expensive, and it worked out fine. Just make sure you pay them because nothing is worse then someone who doesnt pay thier debts

[Chickenhauler]

Hi, I am looking to get a new bike soon and would like to get a new 2012 crf250r. I am 17 years old and have had a job for over a year now. What I want to know is if its alright to finance a bike. The price of the bike OTD will be between $7000-$7300. I will put down what ever half the cost of the bike is so bewteen 3500-3700. I will still have $1500 in the bank for mods and savings. I just found out today that I can not get a loan even if I have my parents cosign with me because of my age (there credit score is about 800 by the way). So what I would have to do is get my parents to get a loan and then I pay them each month. The bank chargers an 8% intrest rate. My minum payment is around $100 per month but I will pay about $400 a month and will have it payed of by may 2012 at the latest. I work 20 hours a week so I make about $500 a month. My 2007 crf250r is going to need about $2000 worth of new parts soon so I figured I would just get a new bike which I have been wanting any ways and keep the 07 as a back up bike.

Does this sound like a good idea?

NO.

Here's the flaws with this plan.

You make $500 per month in wages. No way are you going to be dedicated enough with a brand new bike in the garage to put $400 of that against the loan. Trust us on this one.

You have neglected to factor the cost of insuring this new bike. Lenders want their collateral to be insured.

Then you go on to say you have about $5k in the bank ($3500 down money + the $1500 for savings and mods). Buy what you can afford with what you got.

Your 'old' bike needs $2k worth of work. And you're going to keep it for a spare. Still gonna need that work, where is the $2k going to come from for that?

Here's what I'd do if I wanted a new bike-sell the older bike, put that together with the $5k you have in savings and pay cash up front for the new bike.

[klampton317]

This is a bad idea. Unless you are a VERY competitive A class rider there is no reason for it. Even then, its still sketchy. Given the current economic environment, there are A LOT of good deals on lightly used bikes that people are trying to get rid of for cheap. Do yourself a favor man. Save up for a little while longer. Honestly, $3000 can buy a lot of bike right now if you go used.

[wes513v]

NO.

Here's the flaws with this plan.

You make $500 per month in wages. No way are you going to be dedicated enough with a brand new bike in the garage to put $400 of that against the loan. Trust us on this one.

You have neglected to factor the cost of insuring this new bike. Lenders want their collateral to be insured.

Then you go on to say you have about $5k in the bank ($3500 down money + the $1500 for savings and mods). Buy what you can afford with what you got.

Your 'old' bike needs $2k worth of work. And you're going to keep it for a spare. Still gonna need that work, where is the $2k going to come from for that?

Here's what I'd do if I wanted a new bike-sell the older bike, put that together with the $5k you have in savings and pay cash up front for the new bike.

+1 on that. No way you're going to live on $100 a month even living at home. And with the insurance, you don't even have the hundred. I do suppose you are planning to have to buy gas to get to work, and to insure your car? As nice as a new bike sounds, you can't afford one. At least not with your plan. And as every one else stated, financing toys is a bad idea.

[665]

Don't do it. Take it from a 19 year old with TWO bike payments in his name. I take $100 out of the check every week for the bikes even if they are sitting in my garage during winter. Do not buy a new bike unless you have cash,.....wonder what that 2012 will look like in 3 years once you have put 100 hours on it and it still has $3k and 2 years owed on it. Save the money and pick up a 2010 or 11 for $3500 and you're set...easy payments are the hardest to make, and yes it sucks because I laid down the 2012 350 sitting in my garage and it now needs a set of Fluidlyne radiators..

Edit-also on insurance..fire and theft only for a street bike is only $9 a month and $15 for the dirt bike..HOWEVER the actual street bike insurance liability is $55 a month that is almost what the street bike payment is itself.......it SUCKS!

[kingdeke]

The OP lives in AZ, so insurance isn't a factor.

If it was a suzuki or kawi you'd most likely get sheffield financial, which is easier to qualify for but they rape you on the interest. Honda is GE capitol which is harder to qualify for but more along the normal lines for a loan.

If your parents have over an 800 credit score they more than likely already have the credit to get you the bike, be it through cards or even the equity on their house, but I'd still save them the unnecessary interest of financing a new bike when you can get the same thing used for much less.

[DustStorm Racing]

Sounds like a good idea to me man I am 17 too and just got a 2011. I rode both a 2011 and a 2012 and it feels about the same and you should be able to lower ANY dealership to about 6700 like we did. And We even worked in a deal where ever thing I need done for my bike they do for 50% off. Just think about the 2011 its alot cheaper now. =)

[Chickenhauler]

The OP lives in AZ, so insurance isn't a factor.

We're not talking about liability, but comprehensive (fire, theft) to satisfy the lien holder that their collateral won't disappear without any compensation.

[rpt50]

The fact that you are asking questions is great--that's a part of developing financial acumen. I'm in agreement with most of the posts here: NEVER FINANCE A TOY! With the money you are talking about putting down, you could buy a used bike that's like new (from one of those guys that thought they wanted to ride dirt bikes!). Furthermore, a 250f would be the worst possible choice of a bike to finance, as there is nothing else on the dealer's floor that is as high maintenance and likely to have a major and expensive meltdown.

If you do go used, I would probably look at something other than a 250f, unless you absolutely need that bike for a race class. A 450f or 250 smoker would likely be a better choice.

When you get older, and have established financial resources, the "never finance a toy" can be relaxed under certain circumstances. For example, equity loans will allow you to pay down the principle, and depending on your credit history and amount of equity, you can get some amazing rates. Even under these conditions however, financing a dirt bike is usually a bad idea, as they depreciate so rapidly. There are other toys with less depreciation that make better choices for financing.