Who knows what the specific terms are....

Maybe it's something like that Sportster promotion ($99/mo. fir the first two yrs, then up considerably higher for the next two, depending on what your interest rate is, or something like that.)

A 10-year deal like that wouldn't be so bad if you can at least keep your payments to meet or exceed depreciation after 24 months (which would be like a "regular" financing plan anyway--almost), and then you can decide to match that pace with minimum payments or pay it down further, or trade it in without getting hosed, too badly.

But 10 yrs of minimum payments....

What was that P.T. Barnum said about lollipops...?

 

Why would someone do this?

1. Get financing at a full 1% lower interest rate. (6% vs 7%)

2. Make extra payments so the 10 yr loan is paid in 5. (no early payment penalty) which in the end, will have you paying LESS than with a 5 year loan at a higher rate. Which would have you making payments no higher (actually less) than had you financed for a shorter term in the first place. And you will be paying the PRINCIPLE down faster, as your extra payments will be going to the principle balance, as opposed to paying the same payment on a shorter term loan, where more of that very same payment amount is going to interest charges. Compounded over time, will have you paying off the load FASTER than the same payment going to the shorter term loan, as well as having you less "upside down" on the loan in a shorter time frame.

3. Have the flexibility that in case of unforeseen problems (layoff, health issues, etc) you can make the much smaller payment for the short term, (or depending on your bank, even skip payments entirely as your paid well ahead of whats due) and hopefully be able to KEEP your bike while still feeding your family and paying your other bills, instead of having sell the bike (most likely at a loss as they typically depreciate faster than loans are paid down) to make ends meet while getting back on your feet, at which point you hopefully get caught back up on the extra bike payments.

4. Have the ability to finance solely on YOUR credit, and your name only, without a spouse having to co-sign, which would then give her legal claim to the bike in event of a divorce, or be able to force its sale (most likely out of spite) to clear her name of the co-signed debt.

I know of several people PERSONALLY, who would still be riding today, had #3 and #4 come into play. Sadly, they are now without a bike, and probably will be for many years to come due to ruined credit and mounting debt. Had they been able to "slide by" for a few months with a smaller payment or no payment (had they been paid ahead), they would have been able to pull through their respective crisis situations.

You can ALWAYS make extra payments on a longer term/lower payment loan, (of course you have to have some discipline) but if you get locked into a higher payment you cant make due to an unforeseen crisis, your pretty much in trouble.

There's more than one angle to every argument gentlemen.

 

I have another plan for financing my new ultra. Borrow it from the 401k plan. My 401k plan was at 115,000 back in July. Since all the crap hit the fan on wall street it went down to something like 80 something thousand. Hell, thats more than the price of a new ultra. I called up the company that has my 401k and they say I can borrow half of it out, no questions or forms to fill out. They take the payment right out of my check for the next 5 years and I'm paying myself interest. My view of it is that at least that way the crackheads on wallstreet wont lose it for me. Whether or not the math all works out to my advantage in the end ,I aint sure. At least I'd have my dream bike and who the hell knows if wallstreet will ever turn around.

 

I borrowed from my 401k for my first HD. Looking back I regret it, as it was at a time when my 401K was pretty much wiped out from my divorce, and of course with less in there, theres less to compound interest against to make it grow. Its now barely back up to where it was pre-divorce.

As for the current state of the stock market, have/did you consider moving your investments to something safer within your 401K (assuming you have the option)

 

Hubby and I financed for 6, and 7 years respectively. I intend to have both paid off in no more than 5, and barring anything major preventing it, it could be 4. Also, we managed to switch hubby's balance over to a credit card offering him a way lower interest rate (like almost 6% less), and we are making the same payments we would have made to Harley, which is much more than the minimum payment on the credit card. We will be saving three grand in interest on his bike. THe flip side is that IF something serious happens that we can't make the higher payments we are now making, we can, if absolutely necessary, just make the smaller payments. Many people, as noted, do not have the discipline necessary to do what they need to do to make sure they do NOT go upside down.

 

Of course Will you were able to depreciate the tractors at a pretty good rate as well , I been down that road with farm equipment myself ..

 

This is a SAD situation.

The American Consumer, US Government, and Corporate America need to circle the wagons, pay the 'stupid tax' get out of debt and build a firm financial foundation - this will not happen with 10 year financing on depreciating assets (alas for the American Consumer)!

Aarrrggghhh! What has become of this country? Are we just that dumb or simply don't care? Depressing.

 

Yes, yes, and yes

 

that's just scary...

 

32 years ago I was selling new Chevies. Believe me, there were plenty of people getting upside down on 5 year car payments even then. You think of all the things that have changed since; "easy terms" on cars and everything else, a boom of rent to own & check cashing businesses, using credit cards to order fast food for crying out loud. Frankly, out of control spending by the government & the private sector is what ails America & the world. In the old days my folks grew up in and later and raised a family in, except for the home, if you didn't have the jack, you didn't buy it. Its coming back to that now folks, better get used to it.