Financing a ride

[Jaco-fiets]

Hi

 

I'm interested to go through the costing exercise of financing a bike. Any hubbers here that went through this exercise recently? Please tell me who you recommend and what to look out for.

 

I see you can even "lease" a bike for 2 years. I assume you then just give it back and get another.....crazy

 

Thanks in advance

[Odinson]

https://community.bikehub.co.za/topic/147631-bike-finance/page-1?hl=bike life

[Tatt]

I think it might become more common in the future with the way prices are going!

 

In the UK we had interest free purchase options, so my first Camber was bought paying £80 per month for two years.

 

The other option is to build your bike piece by piece - my Stage took almost a year to build doing ot this way.

 

Tom 

[Grease_Monkey]

Just don't...

[porqui]

If you can't afford it don't buy it.

 

The problem is that the price of a bike is just the beginning of it.

 

Biking is like a black hole it sucks everything in.

Edited February 7, 2017 by porqui

[Patchelicious]

If you can't afford it don't buy it.

 

The problem is that the price of a bike is just the beginning of it.

 

Biking is like a black whole it sucks everything in.

This! The more expensive the bike the more expensive the upkeep. Keeping XTR and Campy Super going smoothly costs an arm and a leg.

[Kalahari Vegmot]

Please excuse if you find this offensive or off topic; but I'd like to know why you would like to get a bike in this way?

 

I don't think that you need a new bike, and really, who of us usually do?

 

But to make debt to buy a new bike for an itch does not seem right to me.

Rather save up for two years and buy it then. You won't have the joy of the bike for quite some time, but you won't have debt, which in my eyes is a far better option.

 

*I do not know your situation or reason for getting a new bike, nor do I have anything against people buying bikes this way.

However, getting a new bike does not justify making debt IMHO

['Dale]

Rather not give a very experienced cyclist the guidance of financial best practices

 

Rather answer the questions posed

 

????????

[lechatnoir]

1) No such thing as a free lunch...

 

2) If it's too good to be true, it probably is

 

But OP, do the sums on the HP option, and don't forget to add in the upfront deposit. THEN add it all together and work out what your bike is going to cost you in the end.

 

But hey! If you think it's worth it, then do it! It's your decision. *YOU* make it.

[Omlette]

Example

R52 000.

Deposit would be R5200

Payment term would be 36 months min (from Wesbank if im not mistaken)

Interest rate 13%

Monthly installment R1 685.61

Total payment at the end of the term would be roughly R65 881.91

if you can afford the monthly payments comfortably, then why not.

[Omlette]

I was going to do a deal with Cyclelab, they had a bike I really wanted, needed, had to have… but they couldn't get my size bike. Was going to put down a 62% deposit and finance the balance. They were very helpful. Did shop around and managed to negotiate 5k off the price from another bike shop.

I heard some places only finance against the RRP  

[Patchelicious]

 

I was going to do a deal with Cyclelab, they had a bike I really wanted, needed, had to have… but they couldn't get my size bike. Was going to put down a 62% deposit and finance the balance. They were very helpful. Did shop around and managed to negotiate 5k off the price from another bike shop.

I heard some places only finance against the RRP

They only finance on RRP as the discount that the shop would have given you as a cash buyer is passed onto the financing company to help subsidize the lower than normal interest rates on the unsecured loan.

[Omlette]

They only finance on RRP as the discount that the shop would have given you as a cash buyer is passed onto the financing company to help subsidize the lower than normal interest rates on the unsecured loan.

Then Wesbank i would say is the better option, cause they were going to finance against the discounted price from Cyclelab.

[milky4130]

Then Wesbank i would say is the better option, cause they were going to finance against the discounted price from Cyclelab.

but probably against a higher interest rate where as Bikelife will give you a very competitive & favorable interest rate.

[Butterbean]

You'll get many people saying it's stupid and you should save up. And it's probably very sound advice.

 

Some advice given previously was that you should never finance toys. And it's great advice.

 

But for some of us, we will never be in a position to have many tens of thousands sitting and available for a bike purchase. When you're on this end of the payscale, it's just not viable. There will always be something more responsible to do with that kinda cash.

 

Not only that, but I think if you're working hard, cycling is a healthy habit that can justify the money. If you stop smoking or parrying and spend the money on a monthly payment, then I think that's very fair. You're also allowed to have nice things, even though you might not be on the upper echelon of earners.

 

Also, to all those who advise the save up and buy later option, I don't agree. With the way cycling prices go up each year, I'm afraid you'll never save to have the bike you want. Obviously you take some risks with financing anything, but if you can comfortably afford the payments, and can handle things if it goes wrong, then go for it man.

[Grogs]

Bought my MTB on finance from Wesbank. It was a great deal (it was during Cyclelab's annual sale), just didn't have the full purchase price and didn't want to miss the deal.

 

Was a 36 month payment period, with a 10% deposit. As soon as I had the cash (from my annual bonus 10 months later) I settled the outstanding debt in full. Ended up paying (in total, and including finance charges) +/- 15 percent off the normal retail price for the bike. So worked out as a great deal for me.

 

Also, just remember that the interest rate doesn't take into account the upfront "facilitation fee" (or whatever they call it) - with Wesbank it was R1000, as well as the monthly "administration fee" of R57. Worked out that with my deal, I effectively paid about 20 percent interest (after taking into account these extra finance charges), albeit only for 10 months. So the 13.5 percent rate is actually a bit misleading.

 

Point is: do the maths. It ended up being cheaper for me to buy the bike on finance than it would have been if I had saved and waited until I had the cash. And I got my bike much earlier (10 months) than I would have.

 

I had always planned to settle the debt early and not to pay every installment for 36 months. That would have cost me (aside from the pain of having an installment every month for 3 years, with an "asset" that is rapidly depreciating in value).

Edited February 6, 2017 by Grogs