Hey guys-

I'm looking to buy a new (to me) bike. At first I was going to get an EX500 for economical reasons, but once I figured the numbers and realized it wouldn't really save me that much, I figured I might as well have some fun with it. So accordingly, I started looking at 600cc's. I'd really have no problem with any of the other big four names (Kawi, Suzuki, Yamaha), but since I've heard nothing but praise as far as reliability and performance, Honda seems like a great choice. I wanted to just buy a used F2 or F3, since I was looking to spend 3k at most and just not fool around with payments. However, finding one in my area has been a challenge, and I'm honestly becoming rather impatient. Which leads me to my original question:

As an 18 year old male, with literally no established credit, how bad would I be raped payment wise if I decided to finance something? I still wouldn't be getting a new bike, but I'd be able to afford an F4 or an F4i. I'm starting to think if I found one for 4-5k, put 1.5k or so down, and financed for 48 or 60 months, I could easily manage it and end up with a newer bike in the process (versus using all the cash I've allotted myself for a used bike and getting something more used).

So does anyone know from experience, or have any suggestions as far as my situation? What kinds of rates would I face financing due to my age versus some with more credit? Would it even be worth it?

Thanks for reading all that, and thanks for any help!

 

I would imagine there is someone like "American Finance" or one of these other scumbag companies that will charge you anywhere from 16-20% That is just a guess, but I know it isn't good.

 

With being so young and having no credit at all no one will finance you. However, you can get someone to co-sign for you who does have some good credit and you could get away with that. Finance rate will be ridiculous though. I know buddies who have done it and they were about your age and they were lookin at 17% aprs. Now im no expert with how banks figure out payments but say you take out 3500 youre gonna be lookin at at least $600/year in finance charges and thats just if its compounded annually and not monthly. My guess for the 60 month plan would be $150/month. In a sense whatever you finance, plan on paying double it back if you can only make the bare minimums. I would say be patient and save up for a bike. You'll save money on the loan and insurance rates in the long run. Just my 2 cents.

 

First of all you need to establish some type of credit, it can be a cell phone, credit card, or anything else that requires monthly payments. I would reccomend that you do this for six months (its almost winter, at least in SD) and then look into getting a loan. If you can get a credit card from a local bank and then apply for your loan through them. Please dont rush into some looks good on paper loan that charges 18% intrest over 36, 48, or 60 months. At those rates you could save your money and buy a brand new bike after all the intrest you stuck into it. You have to remember the key to good credit is paying off bills. Now what you can do is just spend $15 a month on gas on one card, and then pay it off.

Thats just my two cents though

 

I agree with all the others on this. Sometimes when I was younger I took it in the shorts on interest but payed it back super fast to avoid the interest rate and charges. Worse thing that can happen is they say no, but offer you an OK deal that you can pay off fast....if you can indeed pay it off fast...otherwise, it's gonna be the same ole trap, minimum payments and getting raped on interest. I'd say suck it up, shop around and look for a nice F2 or F3 for <3K, the required insurance (depending on where you live) could potentially cost morre than the bike after 2 years on a newer ride. I think no credit is better than bad credit...others might correct me on this....also important is your debt-to-income ratio...

 

I'm with Troop on this one. Credit to income ratio is very important. It sounds like, since you don't have credit established, you probably don't have many bills, yet. If I can give some advise...keep it that way as much a possible. Would anyone co-sign for you? I don't think it will help you establish credit, but it is a menas to an end.

 

My advice: DO NOT finance ANYTHING at 18. The only exception would be to get a low-limit credit card (like $500) and use it for a couple years to build your credit. At that age you shouldn't be buying anything you don't have the money to pay cash for. Credit can ruin the rest of your life if you don't use it properly. Say you finance a used bike, like an '04. The warranty is going to be up soon (if not already). You ride it for a hundred miles and it craps out on you. Turns out the previous owner didn't take care of it. Now you have to make payments on a bike that doesn't run. Then you have to pay to have it fixed... now you're in over your head with a bike that's not going to give you a good return if you need to sell it.
Just save your money and pay cash for a F2 or F3. If you've never ridden before, buy a cheaper bike anyway in case it turns out you don't like it, or don't have as much time to ride as you thought. Plus if you crash an older/cheaper bike you won't care as much as if it was a new one. F2's can be had for under $3k easily on eBay, and shipping would be less than $500. That's my $0.02

 

I work at a credit union and here's how it works. If you have ABSOLUTELY NO credit at all and you get someone to cosign for you then you get to take on their credit score as far as the intrest goes. The better the credit score is the lower the intrest rate is and the more they will finance for you. If the credit score is low say 620's or so (some may say that's average) then you may have to come up with 10-20% of what the bank/credit union says the bike is actually worth. You have to be very careful when buying a used bike because they depreciate so quickly to a financial institution. For example someone may be selling their '05 for $7500, which is the going rate that people are willing to pay, but the place you borrowed money from says the bike is only worth $5000 and you have perfect credit. They will then only finance $5000 and you'll have to come up with $2500. Even worse scenario you have a low credit score and they will only finance 80% of what it's worth so they'll only give you $4000 and you'll have to come up with $3500.

Oh yea and do NOT go for the "deals" that Honda/Kawasaki/Yamaha are offering. Honda had a "special" when I bought my bike, it was something like $29/$49/$69/$99/$199 and the F4i was in the $69 a month for the price it was at and we calculated it out to be paying only the intrest and at the end of the two year term I would still have owed $8500 and intrest would have jumped up to 20.99%.

Moral of the story is becareful and evaluate what you're paying and such before you sign a deal. I know you're getting impatient now but when you finally find something you like bring your dad along with you after going there a few times yourself and make sure you show a lot of intrest and that you really want it but have your dad say you guys have to talk about it and eventually say your dad doesn't want you to have that large of a payment. Or wait a week or two after you talk to the salesman and make sure he has your information like phone number and address and such and he WILL call you. I had a dealership email me a week after I went in there and put $100 down on a bike saying they would sell me the F4i for $6999 from the $7999 we had previously talked about.

Hope some of this helps.

Mike

 

I started financing stuff when I turned 16. Now, I am almost 21, and so far I have financed a car (when I was 16 for 7500), then a personal loan for 1k when I was 17. So far, the personal loan is paid off and I only have 4 more payment on my car. But, I am glad I financed everything I have so far. Right now, the only thing I have financed is my bike. And I have a 12% interest rate (only that high because the lack of lenght of history). But, if you are responsible enough, I say go for it. Because If you are 25 with no credit history, you will be screwed when you try to get ANYTHING!!! I think it is better to start now and pay a little more, but build it up so 5-10 years down the road, you'll be in EXCELLENT position. Right now, my credit score is 722 from everything I have done. I say if it is something you can handle ..... go for it!!!

 

he is right im 20 with a credit score near 740 when i last checked and I get 0% cc offers in the mail and not the ones for $500 either....my parents help me caus eim in school....spend $100/month or whatever on food gas etc never pass more than 40% of your creidt limit and make larger than minimum payments and your credit and oppurtunities will fly up quick...