Is It a Good Idea To Buy an ATV With a Bank Loan or Financing?

[ATVForMe]

I have enough money to buy a good used ATV outright but I don't want to purchase just a used one.  I would like to spend $8K to $10K to get a nice new ATV/Quad to go riding in the mountains with on getaways but to ride around the country when I'm at home.   

I have about $2K saved up but like I said, I can't afford the ATV I want with that.  Would that be enough money for a down payment? 

I can afford to pay about $200/mo on ATV loan payments if necessary.

Are there other places to get financing than through a bank?  Do ATV providers like Polaris offer loans?

I'm very inexperienced at buying an ATV so thanks for any help!

[dillegm]

I'd say that depends on your income but if you can afford it, sure, go for it. I recently bought a new machine with cash but I was offered financing on it. I had planned on buying with cash but now I kind of wish I had thought it out more. If I had used the $4300 cash and financed another 6 or 7 thousand I could have bought a really nice UTV or larger machine.

I happened to get pretty lucky and got a good deal on a CfMoto with a 3 year warranty so I'm not disappointed but in hindsight I may have made a different choice If I had considered financing. On the upside, atleast I have no payment and still got a nice machine.

 

Yes, dealers offer financing for decent to good credit buyers for all brands as far as I know. Most dealers have several brands in house, atleast in my state they do.

 

 

Sent from my iPhone using Tapatalk

 

 

[davefrombc]

Banks would most likely  offer you  a better interest rate  on a  loan than  an  ATV dealer would..  Either way,  you should also take into  consideration  how  much you would really be  paying for   the  ATV..  $ 8k - 10K plus  the  interest on top  of that ..... Work  out  what the  final  price could be .. Depending on the  interest and term  of the  loan , you could conceivably end up  paying  nearly  double the  sticker  price.  My  personal  choice is to  not  do  it.  My recommendation  would be  to  buy  a good  used machine and  if you  are  a  newby to  ATV's  learn to ride on it.  See if  you really  like  the sport   and see  yourself using  it  a  lot  more to  justify  the  expense of a  new  one.  If the  answers  are  yes to  both ,  then if  you  have  kept your  machine  in good condition you  can sell   it for most likely  nearly the same money you paid  for it  (sometimes  more  if you  got  a great deal to start with) and  use  it with  what  you've saved up  for  a  newer  machine  rather than  paid  out on  interest. Remember ,  like   cars ,   the  value  of the  machine  drops  considerably    once you  have taken  possession  of it ..   If  you  don't  really  enjoy the ride  or  don't see yourself getting deeper  into  the  sport , you  are  out  considerable  money if you sell the machine to  someone else who  would be  getting a  great  bargain  on a barely  used machine.

[ATVForMe]

dillegm: Ya, it would be nice not having a payment.  From what I know, the CfMotos make some good machines.  Thanks for sharing your experience! 

[ATVForMe]

DaveFromBC, 

Any insight in to why you think a bank would offer a better rate?  Also, do you know how long  a typical ATV loan lasts or what the term is?   I'm going to find an ATV loan calculator do some math and see what I think.  

I like the idea of testing the waters to make sure I really enjoy it.  You are right, it would suck to get rid of a new(er) machine at a bad price.  Thanks for your input!

[davefrombc]

I  can  only  go  by  what the banks  and car lots  as well as  other  places that offer high dollar loans offer  here.   Banks  usually  beat   finance companies  and dealers  on rates .  The  system is different in the  US   so  I  cannot   tell you  which would be cheaper in your state.  That's where  you  have to ask and compare  when  considering financing.  I also  can't give any insight  on how  long  a term  they would offer  either  in   Canada  or the US  because  I  don't  buy new  or  on credit.  I'm  rather  old school  in that  respect ..  If  I  can't  pay it  off when  the  bill  comes in , I don't  buy it .  Visa  doesn't like  me  because they  only  get  their   percentage  from the sellers .. My  balance is  paid monthly  so   there  is no  interest  charge.  What's right for  me  isn't  necessarily  right  for  others.

[dillegm]

Local banks and credit union's most likely can offer a better interest rate, smaller payments or a longer term for a loan. Makes sense.


Sent from my iPhone using Tapatalk

[fartknocker]

I always try to finace. Payment is usually peanuts ,plus you can finace extended warranty into it. I'd rather have the money in the bank for other things. The dealers I've always dealt with offered in house financing, but you could always look at a personal loan for the difference, and add on your 2k. Line of credit would probably be the best bet. Also ,unless you are 100% sure of the atv you want,shop around for a demo.. get a great instant discount  and still get full warranty.  

[ATVForMe]

Fartknocker, great idea for the demo.  I didn't realize you could still get a warranty on an ATV demo but that sounds like a nice way to go.  

[ATVForMe]

Thanks again Davefrombc, I will just have to check it out myself.  

I see what you mean about the interest.  I found this ATV calculator and I plugged my numbers into it.  I assumed an $8,000 loan for 5 years at 8% interest(I thought that may be conservative) and my monthly payment came out to $166 which is totally manageable....but I can see that my total payments including principal and interest are almost $10,000.  So I'm almost paying $2,000 in interest over the 5 years.  

Then I tried making the loan term 10 years and it seemed to double the amount of interest...but it did make my payment only about $100.  

But after weighing these results, I'd probably say if I can keep the loan term short enough, I won't have to pay very much interest...and it may be worth it.  

[ATVForMe]

Also, kind of on a side note, any idea what rate ATV's depreciate in value if you take good care of your machine? 

[fartknocker]

14 minutes ago, ATVForMe said:

Fartknocker, great idea for the demo.  I didn't realize you could still get a warranty on an ATV demo but that sounds like a nice way to go.  

Yup. Did that 3 times . My 98 sportsman 500 was a demo ,my 09 850xpeps was a demo and my 11 pro r 800 (sled) also demo lol. Would always try to go that route . My sled retailed at 15k,I paid 10k plus still got full warranty.  

[davefrombc]

2 hours ago, ATVForMe said:

Also, kind of on a side note, any idea what rate ATV's depreciate in value if you take good care of your machine? 

Can't help  at  all  on the  depreciation rate . I think it depends a great deal  on the  brand  and model, as well as the   state / province you are in.  Far too  many  factors come into  play  when  looking at  depreciation.  I  do  know  that  the  big  names ,  Honda,  Kawasaki , Yamaha  and Polaris  tend to  have  a  slower rate of depreciation  compared to  lesser  known   rides.  Honda   likely  has  the  lowest rate of depreciation  of the  lot. I  do  know,  like  cars  and boats,  you do  see the  highest  depreciation  from the time you  take it off the showroom floor to the  end of the  first year.  After that the rate of depreciation slowly  lessens until   they  seem to  float at approximately the  same  price  for  10  years  or  more.  Some  models   20  years  old and  older   sell  for close to the  same  price  they went  for  when  10  years  old.

 

Edited May 4, 2017 by davefrombc