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Bike finance - CRAZY EXPENSIVE


Vanzyl

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Posted
  On 6/30/2014 at 5:03 AM, Pieterg said:

Gee beter opsies en meer mense sal van die finasiering gebruik maak

Agreed, I know its bad to finance a bike, I think most people realize this. At this stage of the year, before the 2015 bikes arrive, there are great deals out there. Some bikes are 25 percent off. Now if they would finance discount bikes, it would make sense to buy the bike at 25 percent discount and finance it over 12 months at 11 percent interest. Considering that when the 2015 bikes arrive, they will be even more expensive than the 2014 originally was. Specialized usually go up 10 percent every year. Yes its bad to finance toys, but if they change their policies slightly it might make more sense. They could even ask for a bigger deposit, like 50 percent, which would reduce their risk even further.
Posted

We have an arrangement in my house whereby toys have to be paid for cash, no arguments (if you met my wife you would understand). Pre kids I was fortunate enough to buy a fair amount of toys (knives and guns) and these are now essentially my currency for buying a new bike. So, I have been desperate to buy a new mountain bike for a year now (the whole want v need debate has been mad in my head), and have been slowly selling toys and dropping the cash in my safe, as well as a few hundred rands a month that sneak out of my wallet into the safe when nobody is looking. Once I have enough I will be in a position to negotiate a strong discount due to paying cash as well.

 

Doing it this way has given me a real sense of the value of what I hope to buy and has also made me less precious about the whole new v used debate. Having been quick to use credit when I was younger, although I never got into unmanageable debt, I have an innate dislike of paying ridiculous interest rates for anything.

 

I don't purport to tell anyone else how to run their finances, but am only sharing my experience.

Posted
  On 6/30/2014 at 7:30 AM, Wahoofish said:

Pre kids I was fortunate enough to buy a fair amount of toys (knives and guns) and these are now essentially my currency for buying a new bike......

at that point there was me thinking you would be getting pink tickets at gunpoint!!

Posted
  On 6/30/2014 at 7:30 AM, Wahoofish said:

I don't purport to tell anyone else how to run their finances, but am only sharing my experience.

 

I wish this forum and you were there when I was 23-27 years old. Every youngster would be wise to get a financial mentor. (And no, don't come to me - I send them to my wife)

Posted

If you do not like the idea of Finance, don't do it.

 

If you do but don't like BikeLifes deals, use someone else.

 

If you cannot afford a bike, don't buy one.

 

 

It is exactly this uncontrolled spending that has created a unsustainable lending market.

Posted

Only a ignorant fool would argue that purely from a financial and cost perspective that you should not be paying say 18% interest rates over 12 months to acquire a depreciating 'asset' when you could rather save the money over the same period and acquire the asset at the end of the period.

 

e.g. To finance a R30 000 bike over 12 months at 18% NACM in arrears would cost R2750 p.m. If you saved that money in a savings account earning 3% interest you would have R30 630 available after 11 months so you could pay cash for your bike. Great - well done. That means your finance will have cost you the extra 12 month payment of R2750.00 + the R630 you would have in your savings account. So it's cost you and extra R3 380 over 12 months to finance your bike and not save for it. Put differently that's R282 p.m.

 

So the maths is quite simple but what the maths doesn't show you is the fact that you got to buy (and therefore ride and enjoy) the bike you wanted 11 months earlier. And that enjoyment cost you R282 p.m. Is that worth it? Only you can argue that but I bet ANYONE here can save R282 p.m. buy buying less food/drinks/airtime/data/petrol without really trying.

 

So back to my original point - if you can't afford the R30 000 purchase price but can afford the R2750 p.m. and that means you get to enjoy the bike you want NOW instead of 11 months time then why not.

Posted
  On 6/30/2014 at 8:12 AM, sometime said:

Only a ignorant fool would argue that purely from a financial and cost perspective that you should not be paying say 18% interest rates over 12 months to acquire a depreciating 'asset' when you could rather save the money over the same period and acquire the asset at the end of the period.

 

e.g. To finance a R30 000 bike over 12 months at 18% NACM in arrears would cost R2750 p.m. If you saved that money in a savings account earning 3% interest you would have R30 630 available after 11 months so you could pay cash for your bike. Great - well done. That means your finance will have cost you the extra 12 month payment of R2750.00 + the R630 you would have in your savings account. So it's cost you and extra R3 380 over 12 months to finance your bike and not save for it. Put differently that's R282 p.m.

 

So the maths is quite simple but what the maths doesn't show you is the fact that you got to buy (and therefore ride and enjoy) the bike you wanted 11 months earlier. And that enjoyment cost you R282 p.m. Is that worth it? Only you can argue that but I bet ANYONE here can save R282 p.m. buy buying less food/drinks/airtime/data/petrol without really trying.

 

So back to my original point - if you can't afford the R30 000 purchase price but can afford the R2750 p.m. and that means you get to enjoy the bike you want NOW instead of 11 months time then why not.

Very well said. Also, after saving for 11 months, chances of the bike still being R30 000 is almost none. Probably R 34 to 35 000 by then.
Posted
  On 6/30/2014 at 8:15 AM, Johny Bravo said:
Very well said. Also, after saving for 11 months, chances of the bike still being R30 000 is almost none. Probably R 34 to 35 000 by then.

 

If the Rand is dropping to cause those price increases, it's all the more reason to not spend the money. Your car, petrol and pretty much every manufactured good is also to increase in price soon. What seems affordable now is going to seem far less so in 12 months.

Posted
  On 6/30/2014 at 8:40 AM, niterider said:

If the Rand is dropping to cause those price increases, it's all the more reason to not spend the money. Your car, petrol and pretty much every manufactured good is also to increase in price soon. What seems affordable now is going to seem far less so in 12 months.

Also true, but if everyone thinks like that we might as well stop cycling, because no one will buy anything. Still think bikelife can make their options a little bit better, and allow discounted bikes to be financed. I still wont make use of them, but imagine your bike gets stolen, you dont have insurance and you need a bike. In that case you could finance or spend months watching other people ride while you are saving up.
Posted
  On 6/30/2014 at 8:15 AM, Johny Bravo said:

Very well said. Also, after saving for 11 months, chances of the bike still being R30 000 is almost none. Probably R 34 to 35 000 by then.

 

Actually the bike would cost at least 25% less as you have explained in an earlier post, it's the newer models that would be R35K. Using Sometime's calcs the financed bike vs saved-for bike would cost you R33,4K vs R22.5K (ignoring the interest you saved). So the "enjoyment cost" is probably closer to R1K per month than R280 pm.

 

I also believe that you don't NEED a R30K bike to properly enjoy the trails but that's another discussion.

 

That said, spending money on hobbies is rarely the most "financial savvy" thing to do, we should be allowed to indulge ourselves a little ^_^

Posted

Lets forget about the detriment or benefits of saving vs financing for a moment, and remember the OPs issue with the BikeLife prices, a product he later says he doesn't even need.

 

But to continue with the trend, I would like to use the opportunity to say that I think Ferraris are way over priced, how dare they try and charge me R4mil for a car that I NEED.

Posted
  On 6/30/2014 at 9:21 AM, Skubarra said:

Actually the bike would cost at least 25% less as you have explained in an earlier post, it's the newer models that would be R35K. Using Sometime's calcs the financed bike vs saved-for bike would cost you R33,4K vs R22.5K (ignoring the interest you saved). So the "enjoyment cost" is probably closer to R1K per month than R280 pm.

 

I also believe that you don't NEED a R30K bike to properly enjoy the trails but that's another discussion.

 

That said, spending money on hobbies is rarely the most "financial savvy" thing to do, we should be allowed to indulge ourselves a little ^_^

Agreed, it has to be closer to R 100 000. S- works or nothing. :whistling:
Posted

I've been dealing with them for a couple weeks now and they've been nothing but a pleasure to deal with.

I think getting finance with them over a year at 8% is a good deal, anything longer than that, not so much... not for me at least.

As has been mentioned in this thread, the interest paid over the year is worth it, cutting out a couple things will more than cover that amount over the year ..IF one's disciplined enough to do it.

 

As per the R2000 for the service fee, my understanding is it's for services from your lbs to the value of R2000, not R2K for one service.

 

The only reason I haven't gone ahead the deal is because I cannot make up my mind about what bike to get. ( as per a recent post of mine)

at the rate I'm going, with being so indecisive , I'll probably have saved enough not to use them :whistling:

Posted

Proverbs 22:7 "The rich rule over the poor, and the borrower is slave to the lender"

 

The above changed my life. Last year November I had R37k (15%)credit card debt, a couple of store cards (23%) R8000. Burnt my ass paying those debts every month. So Dec bonus settled 70% of my CC end of March 2014 I was debt free. The only people who aren't happy with me being debt free is my bank. The amount of personal loans, lifestyle loans and credit limit increases beep bank is throwing at me is staggering. Oh and the extra money that I have after settling my debt? Opened a RA and best of all the tax man gives me money back!

Posted
  On 7/1/2014 at 6:20 PM, Starvin said:

Proverbs 22:7 "The rich rule over the poor, and the borrower is slave to the lender"

 

The above changed my life. Last year November I had R37k (15%)credit card debt, a couple of store cards (23%) R8000. Burnt my ass paying those debts every month. So Dec bonus settled 70% of my CC end of March 2014 I was debt free. The only people who aren't happy with me being debt free is my bank. The amount of personal loans, lifestyle loans and credit limit increases beep bank is throwing at me is staggering. Oh and the extra money that I have after settling my debt? Opened a RA and best of all the tax man gives me money back!

 

Thats great

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