There is a formua to calculate how much of each payment goes to interest.

Int = (amount * rate**(month number - 1))

That means interest for each payment is equal to the balance owed times the interest rate after it, the rate, has been raised to the power of payment number minus one.

I am only posting this so everybody can see how much of each payment goes to interest.

In this example the first payment uses the rate raised to the power of 119.
The second payment uses the rate raised to the power of 118.
The third payment uses the rate raised to the power of 117, etc..

What this means is that for quite a while most of a payment goes to interest instead of principal. This is why a finance company actually prefers a longer loan, it means a lot more money for them. But....

If there is no penalty, a longer loan means payments are lower but can still be paid off early.
This is why it is good to pay more then the minimum, or regular, payment for anything you pay over time if you can. Even if the rate is raised a high number of times, the 'amount' will be less meaning less of the payment goes to interest.

Or, as I have posted in other threads, use a credit card that charges 0% interest.

Ron

 

It won't work for most people because of lack of disicpline. I have bought several $100,000.+ farm tractors over the years and I always finaced them for as LONG as possible,( usually 7 years) then payed them off as FAST as I could. Never took more than 3 or 4 years. I would not be a bit afraid too finace a Harley for 10 years, if I was 99.999% sure I could pay it off in 2. But you all are right, to figure on taking 10 years too pay off a motorcycle loan, even for a Harley Davidson, is just plain CRAZY!

 

I would if it was interest free

 

eagle wouldn't we all?

 

If you have to finance for 10 years, then you simply can't afford it.


End of story!

 

What is intended to put people on new bikes todays is going to do several things to the MoCo in the future:
1. People will be upside down/out of equity therefore have to keep bike longer.
2. If they need 10 year financing they may be a Harley owner, but not a Harley customer. What I mean by this is they probably can't afford to pay for the Harley service as well as all of the expensive goodies we all "need".
10 year financing will hurt that particular dealership that chooses to push this 3-4 years down the road. You are taking your prospective customers down the road out of the market, in service,ad ons,motor clothes, and most importantly future bike sales.

 

[quote=Roadjunkie1;4036063]If you have to finance for 10 years, then you simply can't afford it.


exactly...this kind of creative financing is what let to the home mortgage woes...getting people into loans they can't afford. It appears like they haven't learned their lesson yet~~~~~~~~~~~

 

[QUOTE=LucklessPedestrian;4036101]I thinks I'm gonna go buy that Screamin Eagle Ultra Classic I bees wantin and let the Government come bail me out after I gits behind with my 450.00 per month 10 year payments.

 

Dealership by my house has always had it. I bought my '06 RK with it 'cause they had no interest for 3 months if you took the 10 year loan with First of America. . I then paid off the loan in 6 months. I'd never finance anything with First of America again. They wouldn't give me the payoff amount over the phone, they have to mail it to me! Then they told me to walk into an office to get the payoff amount. I did, and woman in the bank told me I had to call the same number I did before. After complaining up a storm, they faxed it to me and then charged me $45!!!!! After really b****in' up a storm they removed the charge. I paid off the loan the next month and since I didn't know the exact amount, I slightly overpayed and got a refund.

 

what an insane idea.......
but I'm sure some people will do it