When you bought your ATV did you pay cash? if not how did you finance it? I have purchased 2 quads in the last 3-4 months and financed them through the dealer. Their introductory interest rate is OK but when that ends I am going to want to refinance. I called a couple of banks and they either don't finance ATVs or consider them a personal loan and want to charge huge rates. I am still looking but was wondering what experiences you may have had.

 

I went through my credit union. 6% interest for life of loan.

 

Paid for both of mine with cash and I'm glad I'm not paying interest.

 

Just remember.......cash is not always the best option. With interest rates so low right now, you're probably better off with a loan and invest your cash. The markets are turning around along with the economy.

 

Any financing offer that offers a low "tease" rate and then jumps up to a high rate is a bad deal - unless you have the ability and cash flow to pay it off during the first, low interest period. Most of the dealer financing deals will be this type or of a higher interest - you are paying for the convience of one-stop shopping.

If you can't pay cash (and MileHigh has a good point - nowadays borrowed money is so cheap that you should borrow and use your cash elsewhere), the price of an ATV is so small that it is harder to get a typical "auto type" loan. You're better off with something like a home equity line of credit - credit unions currently offer these in the low 4% range.

Jaybee

 

If you own your home...look into a home equity. Not the best interest, but not the worst. Tax deductible too.

 

With a quad being a depreciating asset I would hate to take a loan against your house on one.

Chet

 

It doesn't really matter what you are buying with your home equity money. The equity available is there due to the value and equity of your home - an appreciating asset. If you ever sell your home, part of the selling price will pay off the equity line debt - it doesn't matter if the quad you bought is still in showroom condition, has been totally trashed on the trails or has been stolen. For that matter, it doesn't matter if you use your equity money to pay for a vacation - an item that has 0 dollar value once it is used. The important thing is if you have the cash flow to afford an additional monthly equity payment. If you can it's a good deal, if you can't then forget it.

As Bobnkater asks in the first post in this thread, there are only two ways to buy a quad - you either pay cash or finance it. If you finance, the bottom line is interest rate, that's what you have to shop for. Length of loan term and monthly payment are important too, but both of those can be adjusted by you during the time that you are paying on the loan - the interest rate will stay the same. As a brief example:

You go into your friendly neighborhood quad store and find "The Quad OF Your Dreams". Tricked out with a winch, a matching helmet and all the taxes and title stuff will set you back a cool eight grand.

Option #1 - The dealer will finance the $8,000 for 4 years at 12%. That means a payment of $210.67 a month with a total amount paid at the end of 48 months equal to $10,112.16. It costs you $2,112.16 for financing.

Option #2 - Same deal, only you set up an equity line of credit for 15 years at 5%. If you keep it at this you would pay only $63.26 a month, But you'd be paying it for 15 years - in a word...stupid. However, you can still make it work to your advantage. Even though it is a 15 year note, it can be paid off early without penality. Some quick figuring will show that by paying an extra $120.97 per month, you can pay off this note in the same 48 month period as in option #1. So now you have a monthly payment of $184.23, with a total amount paid at the end of 48 months equal to $8,843.04.

Bottom line is that option #2 costs you $26.44 less each month and a total of $1,269.12 less over the four years that you are making payments. Your quad may depreciate but you have less money in it so you come out better whenever you sell it.

I'm not sure how accurate the 12% figure for dealer financing is. Probably some dealers can do better but I know that I have seen some "factory financing" offers that can be as high as 16 - 18%. Those no interest/ low interest offers for the first six months can make the dealer financing package better, but if the second tier interest rate jumps up to 16% or more it will more than offset any savings you had in the beginning. 5% for ELOC money is very real - I carry an ELOC at 4.25%. The ELOC option has another advantage too - Since you are paying an extra payment each month above what you are obligated for, if finances really got tight you could always drop all or some of the extra payment for a month or two. You will pay for it of course, but with a cushion of over $1,200 it can give you a little breathing room if you need it during tight financial times.

All this is assuming that you have good credit. If your credit history sucks your options will be limited - the dealer financing package may be the only option available to you. Just remember - no one "gives" you a loan, you are simply buying money.

BTW - I basically pay cash for my quads. When I bought my Eiger last winter I put every dime of the cost on my BP Visa card. I paid off the entire amount within a month so I paid no interest. Then, Visa sent me $52 in free gas cards for making the purchase.

Jaybee

 

I have several credit cards, and I'm always receiving these low-interest balance transfer checks from the credit card companies. I got a batch from American Express the other day, offering 3.9% until the balance is paid. I called to make sure that they could be used for purchases rather than strictly for balance transfers, and they assured me that it could be used for any purpose other than cash without incurring any additional charges. Thus, I will be writing one of these checks tomorrow for my SP700.

Another good thing about this type of financing is that you are not forced into any specific monthly payment other than the CC company's minimum payment, which is usually quite lower than what it would take to pay the balance off in, say, five years. As such, you can pay more when you've got extra, and drop your payment when you're a little short.

-Mark

 

I tried to do that when I purchased my last quad and the dealership would not let me do. The card I had at that time gave you back 2% up to a capped dollar amount. So I had to write a check.

Chet