Insane Motorcycle Financing - Hattiesburg Cycles
Often motorcycle shops host such deranged financing; you’ll need more than a leather suit and helmet to protect your money from the ferociousness of the attack. The financing these shops saddle young (and often compulsive) buyers with beats any dirty tricks ever crafted by the credit card industry. Within this article I’ll discuss insane motorcycle financing and the best way to actually purchase these merciless promoters of human pain and suffering.
Before we get into the bulk of the article I would like to post this update concerning the financing from Hattiesburg Cycles in Hattiesburg, MS which I describe below. These guys have a large selection - I bought my first bike at Hattiesburg Cycles and didn’t feel like I was ripped off. I wish I could say the same of everyone.
One year after the purchase of his GSX-R 750 my young friend sold the bike. However, he’s still stuck with $4800 in charges on a credit card that has an interest rate of 22%. Hattiesburg Cycles financing placed the bike’s accessories (helmet, jacket, etc) and get this…..the interest from the loan on the bike on a credit card in his name. He wasn’t approved for a high enough credit line to get it all covered in one loan so the interest went on a credit card. This means he paid all the interest on the loan up front (by placing it on the card) and now must pay credit card interest on top of that. He’ll end up paying a lot more in interest than he ever paid for the bike. The bike was around $10,000.
As far as Hattiesburg Cycles is concerned I don’t blame them for doing what they are doing. They are simply trying to turn a profit so they can pay their employees and remain in business. I’m merely pointing out - that using financing such as this should require your brain scrubbed with a toilet bowl brush to get the crap out of it.
Insane motorcycle financing
A friend of mine purchased a sport bike a while back at Hattiesburg Cycles and has been complaining of the financing, saying that he must sell the bike. After listening to how it was financed I knew an article needed to be written about the stupid conundrums twenty year olds are willing to accept in order to achieve their goals (in this case; sport bike ownership).
This is truly mind blowing. First of all the sport bike was listed on the show room floor at $10,200. My friend then had $3,000 worth of accessories added to the bike before it even left the dealership. The balance of $13,200 was split and financed in two separate methods.
Hopefully only a compulsive twenty year old would agree to such terms (just for fun let’s pretend that silly financial behavior stops at 21 - IF ONLY!). He put $2,000 down on the price of the bike lowering it to $8,812 (when sales tax is included). So that leaves us with $11,812 to be financed when you include the accessories. His interest rate for the ‘in house’ loan for the bike principal was 16%, which is already a very steep figure, even taking into account that bikes normally have higher interest loans. So, at 16% and 60 months you have a total of $6,420 in interest with bike and accessories combined!
Hattiesburg Cycles had their ‘in house’ loan agency finance the $8,812 and $3,000 worth of the interest. Now this is the completely insane part I know you’ve been waiting to hear about. The other $3,400 in interest (on bike principal) and the accessories was placed on a credit card that the dealership provided for him. The name of it is Funancial Credit, sounds like a lot of Fun to me. I’ve never head of interest being paid up front on a loan but I guess if you’ve got to have a sport bike you’ve got to have a sport bike. I wish this was the end to the insanity (IF ONLY)!
The interest rate on the ‘credit card’ is 22%. Honestly, I can’t make this stuff up folks. This twenty year old is paying 22% interest on a credit card - comprised partially of the 16% interest on the original loan and accessories. He said that on his credit card balance of around $5,000 he normally pays barely over the interest fees. The note on the ‘bike’ is $197/month; meanwhile he also pays $150 to $180 per month on the credit card. If this continues for 60 months (which won’t be long enough unless he increases his payments on the ‘credit card’) he’ll end up paying around $22,320 for a bike and accessories initially valued at $11,812. Oh the horror…..the horror.
Bike financing that doesn’t seem so bad
Next I interviewed Staff Sergeant Quinton Martin about his recent Harley Davidson purchase and financing. Quinton received a much better deal, having promised himself a Harley after his second return from serving in Kuwait. His bike was used and one year old when he purchased it. The previous owner had purchased the bike new and was a fellow service member who was about to be shipped out to Kuwait. The bike originally listed at $18,500 and the new owner also installed $3,000 of chrome and other accessories.
Though this barely used Harley only had 4,000 miles, Quinton purchased it for $15,500. Not a bad price for a bike retail valued at $21,500 (with accessories) just twelve months earlier. Since Quinton is an active service member of the Mississippi Army National Guard he is able to achieve 6% interest on all loans, a nice perk for serving in our nation’s military. If he pays the minimum for 60 months he will pay $2,600 in interest. This financing is not nearly as vicious as the insanity mentioned above. However, that is still $2,600 that is wasted - at least in my opinion.
Avoid using credit, especially for toys
It’s bad enough that we use credit for homes and vehicles; these are things that are necessities for most of us. But to borrow money for purchasing a play pretty is a complete waste of money. Just for a moment……..stop and think of all the things you could buy for $2,600. Why give that money to a banker?
If you’ve followed this feed for even a short while you know that I’m a stickler about paying cash. Pay cash and avoid paying interest. We cannot afford to pay for interest, it’s one of the few things that we actually have control over. Don’t waste money for the sake of having an item now. Be patient, pay cash, and buy used. At the end of it all you’ll be glad you heeded this advice. Go forth and be debt free!
If you have any stories about financing a bike, 4-wheeler, or boat, please tell about your financing in the comments below.
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Tags: credit, finance, interest, loan, motorcycle
March 23rd, 2008 at 9:35 pm
[...] Read the rest of this great post here [...]
March 23rd, 2008 at 9:38 pm
That is 180 kph. methinks death would occur quite quickly at 180 mph with traffic going 1/3 the speed all around him.
March 23rd, 2008 at 9:46 pm
Gonna have to disagree with you - not kilometers - its mph. The rider has slown down considerably by the time traffic is reached.
July 28th, 2008 at 8:34 pm
So I went in to hattiesburg cycles the other day and I wanted to buy a motorcycle. I was more so looking to see if I could find what I had in mind. Well I walked in and a salesman approached me and wanted to help. I was asking for a Ninja 250. He first off said that they didn’t have any and I wouldn’t want the 250. He said that it would be pointless to finance a Ninja 250 and then turn around three months later and come back and want to trade it in for a bigger and faster bike. I said buddy I really just want the 250. He replied by saying that There was a waiting list for the 250’s and that he knew for certain I wouldn’t want it.
All the salesman wanted was for me to buy the more expensive bike. The 250 was priced from $2800 to $3700 he said. The bike he wanted me to get was $7000. I was like no no no no I want a cheap bike. It’s my first motorcycle. I don’t want a damn speed bike….I want a little bike that gets good gas mileage and is cheap. Anyways…..They had no Ninja 250’s there so i left. He repetedley said we can finance the suzuki 600 for you. I said no that’s fine. I ended up walking out with nothing.
July 28th, 2008 at 10:18 pm
Hey Jeff,
That’s funny, I actually bought a ninja 250 from Hattiesburg Cycles years ago. I sold my car and just drove that little bike for a year in all sorts of fun weather. I think it got over 70 miles to a gallon. The reason I didn’t buy a more expensive bike was because I didn’t know if riding a motorcycle would become a passion for me. Turns out I was right. I sold the bike for pay off a year after i bought it. I haven’t rode one since.
The sales guy at Hattiesburg Cycles probably doesn’t want to sell you that cheap bike because they probably pay no commission on it’s sale (or very little).
July 30th, 2008 at 11:43 am
Hello .. I was just passing through looking for inspiration for posts on my blog and stumbled across your blog.. just thought i would post and say hello.. Ive just started my own new blog about bike games over at http://www.bike-games-to-play.com and was hoping you would be interested in a link or content exchange maybe.. if so please let me know.. great blog by the way