Mountain bike financing: Good idea or bad idea?

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    • #204759

      I noticed some of the big brands are offering financing offers on mountain bikes and I was curious, has anyone ever taken advantage of this? In hindsight, was it a good decision or a bad one?

      Personally I’ve never borrowed money to buy a mountain bike, though maybe I did borrow a couple hundred bucks from my parents to get a bike in college. To me it seems like a bad idea to finance a bike, given how much bikes depreciate, but then again, it might be the only way some folks can get the bike they really want…

    • #204767

      knowing the spending/saving habits of the average American it’s probably the dumbest thing.  If you can score interest free financing and be disciplined enough to pay it off go for it.  But I’ll guarantee you the interest rates on these plans are pretty high.

    • #204772

      Right, I’m also curious to know what interest rates people are paying on these bike loans.

    • #204773

      While the high end bikes are great, they are way overpriced and financing just would allow the companies to gouge the consumer even more. Not that I didn’t spend too much on my bike, I have a FS and plan to buy a more expensive one soon, but it is not really needed. Any $500 HT will go anywhere a top end HT or FS bike will go if a person has the skills. I might buy an expensive mountain bike but I would never finance a bicycle.

       

      And for those that say they are not overpriced.. top of the line KTM race ready bikes

      KTM SCARP 29 SONIC 12s $10,995.00

      KTM 450SX-F 2017 12,495.00 (it’s got a fricking engine and only costs $1500 more???)

    • #204776

      Bad idea. I’d say that generally, financing anything that depreciates in value is a bad idea. And when it’s a major want VS a need, as Alivn pointed out? Really, really bad idea.

      (You could argue that a car could be a “need” item for transportation to/from work depending on where you live. And while cars depreciate, they don’t depreciate nearly as badly as mountain bikes.)

    • #204778

      while cars depreciate, they don’t depreciate nearly as badly as mountain bikes.

      I sense the same thing, but I’m planning to do some research to find out if this is actually the case. Stay tuned for an article on the topic!

    • #204801

      Terrible idea. But I’m sure lots of people will tell you it’s fine to buy things you can’t afford, to justify their own choices.

    • #204815

      That all depends on the terms.  12/36/60 mo 0% would def incentivize me to consider a model just above my budget.  If it’s 9.9%?  Forget it.

    • #204816

      Bad idea. Plain and simple.

    • #204826

      i think it depends how much you are financing. i financed mine and it was just over 1k and i have 12 months to pay it off with no interest so i didnt think i did to bad. i mean who has just over 1k laying around to go buy a bike? at least not your average joe. no way i would finance some of the higher end bikes like santa cruz or a yeti etc. i mean some of the prices on those bikes could be a down payment on a new car. just my two cents.

    • #204828

      I repeat others that it’s not the best idea if there’s interest involved. You buy a bike with “discount” just to pay that amount and more in interest charges later.

      Even if there’s no interest on purchase, it’s still motivates people to buy things way over their buying powers. This ain’t good neither.

      like Mr Carlin said, “this is just another way a seller says to a customer bend over a little bit more”

    • #204829

      You’re always financing material things with your time, whether you pay now or later.  The better question is: how much of your life do you want to trade working for “x”?  Let’s say you have a ‘good’ job and make $50 per hour (that’s about a 100k per year income).  After taxes and living expenses you actually make about $20 per hour (and that’s being generous). So a $10,000 mountain bike will cost you about 500 hours or 63 full working days of your life.  Alternatively you could by a very high quality used mountain bike for $2,000 which only costs 100 hours or 12.5 full working days (which is still absurdly expensive for a bicycle).  You now have 50 days of free time to ride this used bike relative to some fool who spent $10,000 on his cool bike that sits in his garage while he’s at work.

      • #204832

        I would have to agree with you on that.  Having that mindset keeps me from running through drive through windows if I think “I fed x number horses to eat this cheap burger or taco” lol

    • #204834

      On the other hand, I can see two sides of this.

      1) a young person needing to establish credit so that they can move on to something like a mortgage.  We went through this with my husband.  Not bad credit.  Just no payment history because he had always paid cash for his vehicles.  We used a sporting goods card to finance about a $2k purchase and in a year, he had payment history and a decent credit score.  We got 0% interest, it was not hard to pay off, and we got our end goal out of it.

      2) What happens when you wreck/destroy said bike that is under financing?  You may want to check with your insurance provider on either scheduling it on your homeowner’s policy or buying a stand along personal articles policy.  Make sure that it is for “replacement cost value” so that if it is stolen or destroyed, you aren’t on the losing end paying for a bike that you don’t have and now cannot afford to replace.

    • #204836

      You may want to check with your insurance provider on either scheduling it on your homeowner’s policy or buying a stand along personal articles policy.  Make sure that it is for “replacement cost value” so that if it is stolen or destroyed, you aren’t on the losing end paying for a bike that you don’t have and now cannot afford to replace.

      Yes, I’m also interested in hearing how people deal with insuring bikes, if at all. That’s a separate conversation so I’ve started another thread here:

      Do you have insurance for your mountain bike?

    • #204846

      Though I love riding, I consider mtb as a hobby. And I don’t use credit card for my hobbies, because Im trying to be responsible with the budget. If I cant pay cash for it, then I cant afford it.

      And yes, financing for a hobby is a very dangerous thing, so BAD idea.

    • #204853

      And yes, financing for a hobby is a very dangerous thing, so BAD idea.

      So wait, what about financing a speed boat? I’ve heard that’s a great decision. 🙂

      • #204859

        I can only afford a bike Greg, so I might go the financing route if I get an itch for a speedboat 🙂 …if I don’t get shut down by the mrs lol!

    • #204872

      “But I’m sure lots of people will tell you it’s fine to buy things you can’t afford”  that’s Bull$%*^ I did consider using financing for my next bike but ditched the idea. I’m a kid working on days off school to pay for my bike… and really it’s such a good feeling when you put all that hard work into it and you get something out of it. Also I don’t need to worry about it sitting in the garage I will ride every few weekends and normally after school some weeks. Ahh just ’til I can drive and take myself to other riding destination other than the local trails….

    • #205370

      I financed mine and payed it off before the interest hit. Only way I was dropping 5gs on a bike

    • #205391

      I’d only reccomend it if you have the cash already set aside. I mean at 0% interest, granted you’ll only make a few cents in interest, holding on to you’re own money longer and using someone else’s for free is always a good idea to me. Again as long as you already have the money set aside otherwise forget it. Then if an emergency were to happen you would have some extra money beyond your emergency fund if you have one.

      Noting on Jeff’s insurance comments, we wanted to schedule our bikes because we race and have expensive bikes, both my wife and I so we have like 10 higher (not top of line) bicycles. We found with our regular homeowners policy it would cost us an extra $1600/yr to schedule about 10% of value. And I know pretty well if someone is going to break in and steal a bike they aren’t just taking one and my regular deductible is $2500 so every 1.5years I could buy a new bike for the cost of scheduling vs paying the deductible. And if bikes are stolen more than that then we’re just really unlucky. We keep them inside the vehicle locked when were not on them and in the basement so typically out of site out of mind. I would consider scheduling if I lived somewhere sketchy.

    • #205470

      Perhaps a good idea if you intend to ride the bike for many years, but a bad idea if you like to have a new bike every year or two.

    • #205670

      TREK has a credit card option and if you qualify you can buy a bike at  0% interest for up to 12 months (though my LBS said anything over 6 months hurts their profit).   I think this would work good  for someone in my position (retired, fixed income), though I would hate to pay off the bike if it got stolen.

    • #205739

      Like most things I would say “it depends”. If you really don’t have a way to afford the bike and have to use credit then I agree it probably isn’t the best thing to do and you should continue to save. If, however, you can get the cash interest free and are assured of paying it off before interest starts then it seems fine with me. I say that after financing my Santa Cruz Hightower CC build via a Trek credit card with 12 months interest free financing. I didn’t have all of the cash at the time but had a plan through work and selling a couple of other things that would ensure my ability to pay the bike off before interest hit. Plan to cut a check next month for the remainder, 4 months before the interest gets lumped in.

       

      If there is any chance you can’t pay it off before interest then definitely don’t do it. I believe the rate for my card is 21% or so (might be as much as 24%) and it is retroactive, so if I need the 13th month or longer to pay it off then interest is calculated from last summer when I bought the bike. The card issuer is certainly hoping people can’t pay off the total so they can start raking in sizeable interest fees.

    • #205740

      I found a bike shop that still offers layaway, an old school concept. I put a deposit on a new bike and will be paid off ready to ride when the weather improves. It’s a great deal for me. No interest, and I’m not missing anything since the trails have been closed due to wet conditions.

    • #205901

      I took advantage of offers my LBS was offering on my last two bikes.  I was able to finance both bikes with 0% interest for 12 months.  Had these offers not been on the table, I would not have financed them with a set APR.  If someone comes across a deal like this, please make sure you are able to pay off the bike in its entirety prior to the 12 month deal expiring.  Otherwise, they will back bill you for all the interest over the past 12 months and you will be responsible for paying it.  I have seen the APR on these types of deals be as high as 21.99% APR.  I hope this helps.

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