Is financing a motorcycle a terrible idea?

So I’m a 22 year old young lady and some background on the situation is really this, I live with my dad, I don’t pay rent, or car insurance while I’m going to school is the deal I made with my dad. I only have two retail credit cards for tiny amounts that I do use but not for anything I couldn’t pay off right away. I also make $70 payments on and emergency room bill twice a month cause I want that gone. (Only a tiny bit longer) I work a full time job for about $12/hour.

My dad agreed that it could be beneficial for me to buy a bike, I own my own car and I don’t need a new one at the moment. But he liked that I finance a less expensive bike like under $7000 and just make larger Payments on it since I am able to afford it, I would pay the insurance and all that stuff.

I’ve been pouring over the internet and I get really discouraged that there is such conflicting advice, some people are like “you’re a damn fool to finance a bike. you don’t have the money to put down on the whole thing, you don’t get a bike” and others find it quite a reasonable credit building tool if you’re going to maximize the benefits from the situation and weigh the costs to the value and time. Sooo I guess I’m just trying to decide if that’s a good financial path for me. I am dying to get into the hobby, I grew up riding my dads Suzuki 180 and Honda 250, he also owned a Kawasaki ninja and a hyabusa at one pointor another. I am still a noob but have an idea of what I’m looking for in a bike and what it’s worth to me. I’ve researched insurance and got my permit, looked into how much registration costs. Like the works, I tried on gear and everything so I already know what I want and have it ordered.

So what I am asking is, am I a naive little girl to want to finance a new Honda 2018 CBR300R for roughly 4999? Plus taxes and fees and all that?

I get it’s MY first bike so the chances of me recking it are quite high, but I also have enough experience that I think I can get by with lots of practice?

It would be a great way to add to your credit rating as long as you are 100% sure you can afford the payments. You know that answer, not us. If you are not comfortable with the payments, look for a cheaper bike with lower payments.

It looks like you don't really want advice if you already have the bike ordered (unless you just have the gear ordered).

My vote would be no. At $12 an hour - you are bringing home about $425 ish a week if health insurance is not being deducted. Is that correct? I would not add another monthly payment until you pay off your emergency room bill. I would double my payments just to get rid of it. And then think about adding a monthly bill. A brand new motorcycle is going to be worth less the minute you drive it home. I think that you should go get your motorcycle endorsement as a first step -- then i would rent a bike for a weekend or something to get back in the saddle so to speak or ride a friends --- did you choose your bike after sitting on many bikes? Most people (me included) will tell you for a first bike at least look at a bike that is well cared for but a couple years old - you could save $500-2000 just buying a year or two older.

The other thing you should consider is if you decide to move form your dad's house next year or the year after -- you will have a monthly payment. Are you also going to school or some type of training to make more than $12 over the next year or three? Maybe on paper you can afford this --- IF you are not laid off, if nothing happens, but are you saving any money along with all this? What if you have to pay utilities next year

If you had no car and this was your way to work (you lived in a warmer climate, etc, and had long stretches of road vs city traffic i might lean towards a payment, but this is a fun toy.

Anyway, just my two cents. I am not against motorcycles at all ---- it just seems that you are spread a little thin with two vehicle payments, higher insurance, etc,... Yes, i am in the camp to pay cash if you are going to get a bike, but if you finance, make sure you are saving an equal amount of money in the bank and get rid of other monthly expenses.

but I also have enough experience that I think I can get by with lots of practice?

if you need practice, i would take a course

Well, as big motorcycle enthusiast I say get into the hobby any way you can! There's nothing like it. And, hey, if you can afford the payments it'll also build your credit, which will come in handy down the line.

That said, why the need for a new bike? There are so many killer used options in the 2-3K range, though I realize you may not have the lump sum. I personally think buying a brand new motorcycle is kind of silly.

The plus of financing is simple: you can get a bike without that lump sum. The negative is that you pay a lot more than the bike is really worth, and as with all bikes repairs and damage will come out of pocket, since insurance is basically a formality compared to cars.

If you have credit cards that you're paying off then you've already established a good credit rating and you don't need to buy a bike if you have a car.

I'd be worried about you wrecking yourself never mind the bike. I'm surprised your father is encouraging it.

If you have credit cards that you're paying off then you've already established a good credit rating and you don't need to buy a bike if you have a car.

 

I'd be worried about you wrecking yourself never mind the bike. I'm surprised your father is encouraging it.

I agree with this! you don't need to finance a vehicle to have credit history. When you get a mortgage, they can go based on your income and the fact that you have no BAD marks - people do it all the time.

I only have two retail credit cards for tiny amounts that I do use but not for anything I couldn’t pay off right away. I also make $70 payments on and emergency room bill twice a month cause I want that gone. (Only a tiny bit longer)

Why don't you pay these off first and build a savings cushion for when you are done with school and out on your own, paying rent and all your own bills?

Regarding a new bike-- your instincts are correct that chances are you'll go down at some point(s), and more likely sooner than later. One drop scratch / dent and your resale value instantly goes down the crapper. The great thing about bikes is very few people use them as commuters, so there's no reason you can't find a lightly used and reliable 2015 CBR for a fraction of the price.

As far as credit goes, an auto loan isn't going to be your best bet. You're 22, and if you're thinking long term goals, I'd honestly just open a couple low-to-no fee credit cards, maybe for an airline or hotel you see yourself frequently where you can get points before paying off/down the balance. Credit card accounts are generally better than shorter term auto loans for bolstering your average account age down the road.

Also, contrary to popular belief, CRBs like to see some utilization. It takes a bit more diligence maintaining payments rather than clearing your balance, but back when I worked in the industry, anywhere from 12% to 20% utilization was the conventional wisdom for the benefit.

You have a car, so you don't need transportation. I would say you need to pay off your debts and get a better job before you go into debt any more. You probably also need to start saving for an apartment and for other things more than you need a bike. When you get a good paying job, then you can get into motorcycles.

Yes financing a very expensive toy is horrible idea. 🛵Why does your father insist you buy a motorcycle? 😟

Wouldn't it be a better idea to save for college, your own place and other more important things? Perhaps you should begin to pay off your car, any other debt, your phone, rent, insurance, expenses, etc.? What dreadful advice from your father. 😕

I live with my dad, I don’t pay rent, or car insurance while I’m going to school. I work a full time job for about $12/hour.

I also make $70 payments on and emergency room bill twice a month cause I want that gone.

This is ironic, because you want one emergency room bill gone in order to pursue another one.

Do you know what emergency room staff call motorcyclists?

'Organ donors.'

Why do you need a motorcycle if you already have a car?