Motorbike money

Nick123321

Hi There
I'm a relative noob when it comes to these sort of things.

I'm in the market for a shiny new motorbike. The one I want is £14,500.

Offered on finance at 5.9% APR over 5 years.

With a quick search (go compare) I managed to find plenty of personal loans for £15k at 3.3%.APR for 5 years.

The repayments would therefore be cheaper.

Surely it's not that simple?
Can I just take out a personal unsecured loan and simply walk into the bikeshop and pay with my debit card?

My credit score is excellent. I have no other loans, just credit cards which are paid in full each month.

Thanks in advance

Nick123321

Also, just to add

I had one of those Barclaycard balance transfer letters. Offering up to £5000 @ 0% for 18 months or something similar. I just threw it away.

Can I use balence transfers for cash in my debit account like I intend here.

Obviously I know it's outrageous expensive if it's not paid off by the end of the period!

davidsuffolk

Your problem might be that the 3.3% is representative (ie if the loan is advertised as being 3.3% representative APR, that means 51% of accepted applicants have to get 3.3% as their rate. The other 49% could get a different rate which is usually higher.)

Assuming you actually got the advertised rate then yes, that would be cheaper.

baz8790

If you look in the offers part when you log into barclaycard it will show you what offers you get.

I can get a cash advance at 0% interest until November with a 1.9% fee for the remaining balance of my credit limit.

But it Will get expensive if it isn't paid off by then.

The dealer finance offer might include a dealer or manufacturer deposit, services or extras.

DCFC79

You credit score is of no use as lenders don't see it, just you you can see it.

the_gardener

What bike you after? Do the manufacturer offer PCP deals? The advantage is that you can get a new bike every three years if you part exchange or pay the final payment when the three years is up.Some manufacturers offer 0% on some bikes.

Superscrooge

Nick123321 wrote: »

Hi There
I'm a relative noob when it comes to these sort of things.

I'm in the market for a shiny new motorbike. The one I want is £14,500.

Offered on finance at 5.9% APR over 5 years.

With a quick search (go compare) I managed to find plenty of personal loans for £15k at 3.3%.APR for 5 years.

The repayments would therefore be cheaper.

Surely it's not that simple?
Can I just take out a personal unsecured loan and simply walk into the bikeshop and pay with my debit card?

My credit score is excellent. I have no other loans, just credit cards which are paid in full each month.

Thanks in advance

It's never that simple!

The quoted 3.3% APR is a representative rate that will only be offered to 51% of borrowers. Others will be offered a higher rate.

It appears from your post that you have good credit history. Using credit cards and always paying off the balance each month increases your chances of being accepted for the best rate, but doesn't guarantee it. Other things will be considered such as affordability based on your income.

To transfer money from a credit card to your bank account you would need a money transfer card. But there is always a fee. You would not get a money transfer card with a £15,000 balance on a 0% deal for as long as 5 years. But could obtain some lesser amount for a shorter term. Some of the best deals on the below link

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

Make sure you are on the electoral role, this always helps with credit applications. .

I appreciate you would like a shiny new bike. But £15,000 is a lot of debt. I would think very carefully about whether this much debt is in your best long term interest?

Nick123321

the_gardener wrote: »

What bike you after? Do the manufacturer offer PCP deals? The advantage is that you can get a new bike every three years if you part exchange or pay the final payment when the three years is up.Some manufacturers offer 0% on some bikes.

Its a BMW S1000XR, so a premium bike, hence the price tag. Instead of the 5.9% APR I said last night. Its actually 9.9% APR.

The deal I am looking at is a PCP. The sales chap said. most people agree to 36months and about 99% of people hand the bike back after the 3 years and simply take out a new deal, rather than paying the balloon payment. The bike is in high demand so the dealer offers no incentives at all yet. There is in fact a 5 month waiting list

Whilst I certainly don't NEED this bike. I really do WANT it. I have done for months now. It may not be the best thing for my financial future, but neither is riding a bike!

I think I will apply for one of those 3.3% loans, see what is offered. Its got to be a better option than the 9.9% offered. I'll also ask if there are any penalties if I wish to pay off the loan sooner.

tomtontom

Can you afford to meet the repayments? Do you have savings now?
Can you afford to meet the repayments if you fall sick/ lose your job/ have a child etc?

Nick123321

Yes I can afford the repayments, I can easily make the deposit.

Rest assured If the missus gets pregnant we will be riding straight off the nearest cliff together! We don't need that negativity in our lives haha!

The question is not should I get the bike, I can decide that for myself... The question is what is the best way to finance the bike.

3.3% APR seems the cheapest if I can get it.

From your guys experience, Whats the difference between a loan for home improvement, debt consolidation, car loan etc etc?

What happens if I applied for a loan for home improvement then spend it on a shiny bike?

I seem to fall under the category of "other"

davidsuffolk

You only pass this way once so if you want this bike and you can afford it, go for it.

Many years ago I sat outside the BMW showroom lusting after an R90S. Never did buy one sadly.

I don't know whether the purpose of the loan makes a lot of difference though if push came to shove you can sell a second hand BMW a lot easier than a second hand kitchen!

Good luck with the 3.3% loan.