Yes, I am financing a bicycle. No, I don't need your judgement.

[Spinnekop]

Or take the Ballers' theory..............

 

"If it rides, flies, floats or ****s........rent it.......don't buy it.........."

[Arrie]

I see a few guys suggesting home loan, that will only work if you plan on paying in extra on your bond to cover pay the amount you took out otherwise you will be paying that bike off over 20years, then I would rather take the finance that to shops are offering.

[Shebeen]

I see a few guys suggesting home loan, that will only work if you plan on paying in extra on your bond to cover pay the amount you took out otherwise you will be paying that bike off over 20years, then I would rather take the finance that to shops are offering.

well that's kind of obvious.

no such thing as a free lunch

[Christie]

Then why marry?

[Arrie]

well that's kind of obvious.

no such thing as a free lunch

 

unfortunately not everyone think like that, they will take funds out of their bond because the repayment will be less with no intention of pumping in extra funds in their bond...sad but true.

[eddy]

it's easy to make a lot of assumptions here. The first one was the OP really thought he wasn't going to get opinions if he asked nicely!

 

but the one that is obvious is that the money is not available upfront to buy outright, whereas the desire to ride that exact bike is. This can be construed as living beyond one's means.

 

options:

*save up and buy the bike in two years time...this requires discipline and means you're riding an old/no bike

*finance - instant gratificationb+ long term financial pain. if there's any buyers remorse/uninsured theft then you're seriously behind

*spend your shekels wisely in the 2nd hand market.

 

The real issue for me is that I'm guessing a financed bike is going to be new. You get screwed on the value the minute it rolls out the door, and then long term with ~20% interest payments and those f#$% monthly R57 admin fees. It's like dropping the soap in the prison showers and fumbling it again once you've picked it up.

 

 

Here is another way to look at it:

 

Assuming a  loan over 48 months at say 15% plus insurance and a monthly admin fee of say 0.15%, you will end up paying around 60% more than the cost price of the bike.

 

Assuming further that your bike will depreciate at say 30% in the first year and then at 20% p/a thereafter on a reducing balance basis, you will end up with a bike worth around 35% of its cost price but around 21% of what it cost you.

 

Assuming further that you will each month put the monthly repayment, insurance and admin fee into a 32-day notice deposit on which you will get around 6% p/a.

 

Draw the graphs and see where they intersect, somewhere in the second year you will have saved enough money to buy the EXACT same bicycle from someone who has taken the depreciation knock and you will end up paying about a third of what it would have cost you if you had bought it new and financed it.

 

In other words, by riding your existing bike for another 18 months you will have your dream bike for about a 66% discount.

 

ps.

 

I have not included the cost of maintaining your bike in the calculation, but if you save that as well, you will have more than enough to give the bike a proper service and replace the bits and pieces that require it when you end up buying it.

Edited May 23, 2019 by eddy

[Stretch]

Aaah the extremes we find...2 posts on the hub at the moment..... One guys asking for a little bit of help to fix his old bike after a reckless driver stuffed up hit wheel, because he just can't afford to do it himself..... While another guy wants the latest bling and is willing to put himself in debt over it.

[Dadbod Racing]

Hence why my cars are old and bought cash and are totes not cool

 

WTF I thought I was the only one... 

[Longbarn Killer]

Here is another way to look at it:

 

Assuming a  loan over 48 months at say 15% plus insurance and a monthly admin fee of say 0.15%, you will end up paying around 60% more than the cost price of the bike.

 

Assuming further that your bike will depreciate at say 30% in the first year and then at 20% p/a thereafter on a reducing balance basis, you will end up with a bike worth around 35% of its cost price but around 21% of what it cost you.

 

Assuming further that you will each month put the monthly repayment, insurance and admin fee into a 32-day notice deposit on which you will get around 6% p/a.

 

Draw the graphs and see where they intersect, somewhere in the second year you will have saved enough money to buy the EXACT same bicycle from someone who has taken the depreciation knock and you will end up paying about a third of what it would have cost you if you had bought it new and financed it.

 

In other words, by riding your existing bike for another 18 months you will have your dream bike for about a 66% discount.

 

ps.

 

I have not included the cost of maintaining your bike in the calculation, but if you save that as well, you will have more than enough to give the bike a proper service and replace the bits and pieces that require it when you end up buying it.

I like your way of thinking.........you must be an actuary.

 

Just two flaws that I can see.

 

1. He now has to wait another year or two to buy a bike. No cyclist can ever wait that long.
2. He gets something second hand after the year or two.Something that someone else has ridden into the ground. He will miss the first two years of having a nice new bike  to ride. I would rather have a bike after two years that I have ridden into the ground than have a bike that someone else has.

[RobertWhitehead]

There is a fairly nice saying I read in one of the financial books the other day: 

 

"Taking a loan is borrowing from your future self" 

 

IMO - If you can see yourself riding the thing for the finance period without wanting to upgrade again and or replace the group set and or other parts on it just to keep up with the Jones', then it's fine, borrow cash from future self. I mean at the end of the day you have to live with the decision for the next 48 months (or whatever the finance period).

 

Something I would suggest is to put Murphy to the test for the next month or two, get all the quotes and paperwork to see what you're in for, now the lowest amount you can finance is something like 30k. I would then take the 1,5k or whatever the installment is going to be and put it into another account where you do not have access to it. Now if you can easily get through the month without said funds then by all means, go for it. 

 

But, if you cannot get through the month without having to retrieve the funds then you have your answer 

[Escapee..]

Can someone please just read the title of the thread and respond accordingly?

 

Didn't see where the OP asked for financial advise or someone to be his daddy and tell him what to do.

[Jase619]

Aaah the extremes we find...2 posts on the hub at the moment..... One guys asking for a little bit of help to fix his old bike after a reckless driver stuffed up hit wheel, because he just can't afford to do it himself..... While another guy wants the latest bling and is willing to put himself in debt over it.

 

And your point is?

[Shebeen]

 

I like your way of thinking.........you must be an actuary.

 

Just two flaws that I can see.

 

1. He now has to wait another year or two to buy a bike. No cyclist can ever wait that long.
2. He gets something second hand after the year or two.Something that someone else has ridden into the ground. He will miss the first two years of having a nice new bike  to ride. I would rather have a bike after two years that I have ridden into the ground than have a bike that someone else has.

 

that is one of the extremes, let me show you the other one.

 

let's look at a "dream bike".

reviewed about a year ago on the hub.

https://www.bikehub.co.za/features/_/gear/reviews/2018-cannondale-scalpel-si-carbon-1-review-r7123

 

In search of unicorns, it seems many are after a dual suspension mountain bike that offers an elusive mix of marathon prowess, cross-country capabilities, with a dusting of trail tolerance. It’s no small ask, but in the last two to three years we’ve seen the makers of cross country / marathon bikes solving for unicorns and with some success.

 

 

RRP R94k

 

 

finance that and you'd be paying about R115k in today's money over 4 years.

or wait a year, and get one with ~1000km on it, at a R30k discount.

https://www.bikehub.co.za/classifieds/361178-2018-xl-canondale-lefty-si-1-price-drop/?source=topad

 

Edited May 23, 2019 by MvdP

[dave303e]

The reality is that now days saving for a few months to get a decent bike is very unlikely. 

 

We paying the same and more as what guys who ride off-road motorbikes are paying for bicycles these days

 

What I don't get is that most times people don't blink an eye lid when motorbikes are financed but jump up and down when somebody wants to finance a sport they love??

 

I financed a bike through Wesbank years back, yes I paid more In the end but enabled me to get my life back. 

 

Luckily I am in a position where I don't need to finance bikes because I put aside bonus money each year. But if I didn't have the "help" to get a bike to start with and to sell when the time came for a new bike I would still be riding an entry level bike.

 

As has already been stated, many people are financing bikes these days, if you can afford it, do it.  You paying for it, nobody else.

 

Good luck and wish you many happy miles on your new bike

 

Valid point, that being said, in 2012 I bought a 250 4t Enduro bike for R25 000, I was offerend R21 000 three weeks ago for it. My 2013 R21 000 hardtail mtb with over R10 000 upgrades in parts will only pocket me like 7k now...

[BluffGrunter]

Do it Bru. You only live once if you can afford the installemnt get the best bike you can. Eff those who think its crazy. ha ha ha

[RobertWhitehead]

If we all read the title we would've all said: Ok. And then moved on  . If we can't be "keyboard activists" and give our opinion about something we know very little about then we'll all be slightly more productive at the office  . 

 

I mean surely it's a very simple concept: If you want to know the price of a car then surely you will get the most accurate estimate from a car dealer. But, if you ask the local green grocer for an opinion he'll try to sell you some potatoes  .

 

 

Can someone please just read the title of the thread and respond accordingly?

 

Didn't see where the OP asked for financial advise or someone to be his daddy and tell him what to do.